Investment Banking Finally Shifting to Big Data Analytics

According to a recent article in Computer Weekly, investment banks have been slow to adopt big data analytics despite the financial industry’s historic role as early adopter of technological advances.

Finance has always been driven by speed of data processing. It’s possible for traders to purchase or access huge databases of financial market results going back decades. Most businesses consider hourly or daily product sales as totally irrelevant to their current situation, or would if they could even obtain that information. However, many financial traders love to devise trading systems by mining data from the United States stock exchanges and bond markets, and options and commodity futures contracts.

Besides, there are a large number of transactions happening every business day, every buy and sell offer and every uptick and downtick of every share of every security. Every day is a big data day.

Despite that, the financial services industry has been slower than other sectors to adopt the most recent big data analytics. Mostly, the funds have used big data analytics just to track subcategories of asset classes. In the United Kingdom, banks have used their findings to tailor their financial products to attract individual clients.

One other thing investment banks do is use big data to evaluate the risk of their portfolio positions. This is critically important to prevent such events as Nick Leeson bringing about the bankruptcy of Barings Bank, the second-oldest merchant bank in Great Britain. In 2008 Jerome Kerviel lost $6.9 billion for the French bank Société Générale S.A. by trading European Stock Index Futures. Financial institutions can no longer afford to let such traders operate without any oversight, but their trades show up included in all the big data as it’s analyzed.

Investment banker Martin Lustgarten serves as CEO of Lustgarten, Martin at Pointe Vedra Beach Florida. As an investment banker, Lustgarten stays on the cutting edge of technological progress.

He’s in his 50s, has lived in Miami and Hallandale. He’s always curious and he loves to juggle. He collects antiques, vintages watches and all things that are beautiful. He also enjoys skiing with his family and adding songs to his Soundcloud account.

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