Standard data sets are wanting when it comes to using analytics to get a jump on the competition. When everyone is essentially using the same data, it gets harder and harder to identify new opportunities. There is a need for unique or alternative data sets that, by themselves or in conjunction with standard data, will provide additional insight and perhaps, an edge.
Alternative data, in the context of financial services, is data that is not typically used to analyze trading strategies and risk. It falls outside of the traditional market and execution data used by most when it comes to regulatory compliance. Examples of alternative data sets are satellite imagery, location intelligence, media sentiment, logistics data, real-time consumer trends, and even weather reports. And the list goes on.
Hedge funds and asset managers are starting to use alternative data sets to help generate investment strategies that, hopefully, have an edge over the competition. However, this subject goes beyond outperforming the market. The demands of regulatory compliance require new types of data sets and innovative ways to explore, join, and turn that data into actionable intelligence.
Proof That Goes Beyond Traditional Data Sources
The obligation of a financial institution is to demonstrate that their policies and procedures are reasonably designed to comply with any regulatory requirement. To do this, institutions are realizing that they need to use information that goes beyond traditional data sources.
Pre-trade electronic communications such as email, voice, chat, and market news need to be considered as well as high-velocity trade execution, cross-jurisdictional deals, and the audit results of post trade events.
Enhanced Compliance Using Alternative Data
Institutions can develop RegTech solutions that meet heightened regulatory expectations while managing total cost of ownership. Big data capabilities provide ways to optimize internal data management and rapidly access and analyze numerous different data sources.
Join Richard Johnson of Greenwich Associates and Paul Lashmet of Arcadia Data for an informative panel discussion with industry experts from data-savvy Nordea and RBC Capital Markets to discuss how leading banks and asset managers are leveraging internal and external alternative data sources to improve compliance and regulatory oversight. Register now for this riveting webinar.