Goldman Sachs’ deployment of Kensho’s big data analytics and its investment in the company reflect growing commercial availability of big data analytics solutions and their use in financial services firms to automate analysts’ tasks and support better and faster decision making based on structured and unstructured big data.
Kensho, a start-up out of MIT and Harvard in 2013, has developed an analytics platform designed to answer millions of permutations of complex financial questions in real time. The platform includes massively parallel statistical computing, visual interfaces and what Kensho describes as ‘breakthroughs in unstructured data engineering’.
Goldman Sachs has picked up the potential of big data analytics and this week led a $15 million investment in Kensho, making it the largest investor in the company and giving it a place on Kensho’s board of directors and advisory board. Goldman Sachs also entered a partnership with Kensho to use the company’s real-time statistical computing and analytics technology across the firm.
Goldman Sachs declines to detail exactly how it will use the technology, with Tony Pasquariello, co-head of North American equity derivatives sales in the securities division of the firm, saying only: “We are excited to work with Kensho to develop user friendly big data analytics tools that can be put into the hands of our client facing teams.”
Daniel Nadler, CEO of Kensho, adds: “We are proud to partner Goldman Sachs around the vision that real-time statistical computing systems and scalable analytics architectures represent the next generation of improvements in the global financial system.”
Goldman Sachs’ adoption of big data analytics acknowledges growing maturity and market understanding of the big data technologies used not only in the Kensho platform, but also in solutions from companies such as DISCERN, 7Park Data and EidoSearch. These solutions were detailed during a session at A-Team Group’s May 2014 Intelligent Trading Summit, which was led by Michael Mayhew, chairman and director of research at Integrity Research Associates.
In outline, DISCERN is an institutional investment research firm that conducts statistical analysis of huge amounts of structured and unstructured data to identify unique investment signals. The firm overlays this data analysis with contextual insights generated by experienced sell-side analysts to identify potential investable opportunities.
7Park Data is a boutique data and analysis firm that sources exclusive structured and unstructured data from third-party providers, cleanses and stores the data using big data technologies, and develops predictive analytics based on this data to generate investment insights. EidoSearch is a financial technology firm that applies pattern search technology to an extensive historical database of market data to generate predictive analytics and return projections for stocks, futures, currencies and other market indices.
Like Kensho, these solution providers aim to automate human intensive knowledge work and allow users to focus on decision making that is timely, proactive, well informed and transparent.