The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Asset Managers Adopt Alternative Data and Advanced Analytics to Generate Alpha

Asset managers are adopting advanced analytics and alternative data to generate alpha and support client acquisition and retention, and business operations. The technology favoured for advanced analytics is machine learning, although natural language processing is also in the picture and smart robotic process automation is in trials.

Element22, a boutique data advisory firm, details adoption of alternative data and advanced analytics in a report sponsored by UBS Asset Management. The report, 2018 Analytics Power, discusses the results of a survey of 20 asset management firms in North America and Europe with combined assets under management (AuM) of $14.8 trillion, almost 20% of global AuM.

It notes that the survey participants are at varying stages of a four-year journey to develop robust alternative data and advanced analytics capabilities, and that some firms have reached an inflection point in generating alpha, improving business operations and increasing client acquisition and retention with alternative data and advanced analytics.

Predrag Dizdarevic, founding partner of Element22, says: “The benchmark study reveals broad-based experimentation with advanced analytics and alternative data across all types of asset managers. The leaders are realising substantial value from their programmes, especially in alpha generation, and we expect this to grow in the coming years. Newcomers should be as aggressive as possible in ramping up their programmes, otherwise they risk falling insurmountably behind the leaders which could be a key differentiator in the industry.”

Ulrich Koerner, president, UBS Asset Management, concurs, saying: “Amid an environment of downward pressure on fees, and an increasing shift from active to passive investment strategies, asset managers must find ways to differentiate themselves and remain competitive in the coming years. With more alternative data available than ever before the most successful firms will likely be those that leverage advanced data analytics solutions across their business to generate value for themselves and their clients.”

Related content

WEBINAR

Recorded Webinar: How to establish data quality and data governance for analytics

Data quality has been a perennial problem for financial institutions for many years, but this needs to change as firms become increasingly reliant on accurate analytics to deliver business opportunity and competitive advantage. New approaches to data quality can help firms up their game and significantly improve their analytics capability. Adding the processes, controls and...

BLOG

Orenda Taps Twitter and AI to Provide Real-Time, High-Frequency ESG Scores

Orenda Software Solutions is taking an innovative approach to ESG by tapping Twitter content and using an AI powered platform to provide real-time, high-frequency ESG scores and insights into a company’s reputation that can help measure the sustainability and societal impact of an investment. The company was founded in 2015 by CEO Tanya Seajay, a...

EVENT

RegTech Summit APAC Virtual

RegTech Summit APAC will explore the current regulatory environment in Asia Pacific, the impact of COVID on the RegTech industry and the extent to which the pandemic has acted a catalyst for RegTech adoption in financial markets.

GUIDE

Entity Data Management Handbook – Third Edition

Welcome to the third edition of the Entity Data Management Handbook which is available for free download. In this updated edition we delve into the role entity data plays in the smooth running of financial institutions and capital markets, the challenges of attaining high quality data, and various aspects, approaches and technologies involved in managing...