TiG’s 2020 predictions

Combining the worlds of technology and finance

Throughout 2019 TiG have seen an evolving approach to the way specialist financial services firms are utilising technology. Those at the front of the pack are considering not only how technology can improve the day to day activities of the business, but also how it can work alongside human insights to complement and improve deal processes. We predict that this approach will expand during 2020, as other firms aim to capitalise by repeating the actions already taken by sector leaders.

There will be a greater focus on AI

Data analytics, including algorithms and AI, enables users to locate the information they need at any given time and also highlight trends and patterns within large data sets that would be unmanageable using traditional methods. This speeds up processes and also reduces overheads, as cloud based technology mitigates many infrastructure and staffing costs.

The use of AI has been increasingly prevalent in firms using multiple data-rich sources, in particular, those with numeric content and alternate data. TiG predict that this will continue in 2020. Technology and digitalisation gives firms the ability to sort and democratise large amounts of data, leading to a competitive advantage. That being said, technology will not replace the human any time soon, being there to support rather than replace human insight.

Data intelligence will lead to smarter actions

Increasingly, specialist financial services firms are seeing the use of data and analytics as both an opportunity and a necessity, even though they struggle with ‘how to make it happen’. Tightening regulations and increasing cost pressures mean that businesses within the sector need to work in ways that are smarter and more effective than competitors, and this will require gaining the best insights.

The irony is that many financial services institutions are already sitting on large repositories of unstructured information, but they don’t always know how to use it. Manual data analysis, with back office staff crunching data on heavily-laden spreadsheets, is commonplace both with deal and finance teams. New tools will be used to assess information and create real insights, enabling the user to optimise decision-making. The goal is to discover what is relevant in a quicker and more effective way, making businesses faster and more precise than their competitors.

Research will be conducted differently

All specialist financial services, from PE houses to Hedge Funds, produce and receive huge amounts of research on a daily basis, covering everything from the global economy to any individual company share price. The way this deluge information is searched and sorted is often incredibly inefficient and slow. Digital transformation will pave the way for faster gathering of relevant insights.

“Digital transformation is key to utilising the data generated by portfolio companies and private equity firms. It could be one of the greatest untapped sources of additional profit.”

– London Business School

New technology will enable the extraction of data tailored to individual requirements

Understanding a research report as a series of interrelated insights and being able to take calculated risks based on this information is a highly skilled job. Applying machine learning technologies means these related insights can be found and presented on a single dashboard, along with other intersected potential areas of interest. This method will unlock the value buried deep within the research without requiring the analyst to change how they write or publish their articles, and will allow the data to be tailored to granular requirements.

As such the area of financial research is ripe for change, however the culture in some firms may delay this change and the associated benefits. Key players within the firm are sometimes resistant to the perceived intrusion represented by new technology and scepticism in the business can be a barrier. Many people don’t believe technology can beat the human. That being said, the firms at the forefront of technology and data science adoption are those that see it not as a threat to the culture, but as a means of strengthening it.

TiG’s 2020 prediction is that the ability to harness information that is relevant to any given market with pinpoint accuracy will be the way forward for financial players. TiG’s cloud services are fully secure and approved to global financial compliance standards, providing fund managers, investors and clients with the highest level of assurance that their money and data are safe. Contact us to get started.

Take at look at Octopus – TiG’s simple starter package for data analytics.

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