Analytics, Rules and Visualizations Changing Global Finance Companies

Financial companies are making bigger, faster and ever more complex decisions using huge quantities of data and requiring analytics horsepower.  Details of the impact and unique abilities were on display at the first annual Financial Services Industry Forum, hosted by TIBCO Spotfire in New York City on Nov. 9.  Companies shared use cases and applications for getting better, more consistent and universal global insights and faster compliance.  Others achieved simpler and more complete regulatory reporting or deeper understanding of daily operations. 

Growing use of data visualizations, rules-based systems being powered by statistics packages such as R or S+ tied to analytics can deliver insights to an ever-wider user within the organization. Sharing and collaborating with real in-memory data instead of reading from historical reports is just one way that meetings and decisions are getting smarter, data-driven and supported by the best information.

One interesting example, from Benoit Strek, vice president at BNP Paribas, lets users drill deeply into the underlying data about investment holdings to see how performance is being affected by the country, type of company or industry and other unique details.  In his visualization demo, a heat map showed holdings with the greatest increase in basis points to show the stock and how each stock contributes to the portfolio performance.

Users at various levels can gain the same detail– from retail investors to financial managers and fund executives. “A portfolio manager can see a snapshot of the holdings, country, performance and relative contribution,” he said. “With Spotfire they can easily zoom in on a specific period and get access to the same data and deep details about period and do their own queries and time — daily, weekly, monthly.”

The issue of knowing these details across an organization is vital as large corporations implement Global Limit Management, said Venkat Mullur, senior director of financial services industry solutions at TIBCO Spotfire. GLM is a set of rules that dictate minimum or maximum prices, total number of shares or other details that top executives implement to avoid conflicts, regulatory oversight or other impacts. When a particular action exceeds a GLM , Spotfire can alert users or superiors that an action might violate predefined rules. For instance, a GLM toolkit can avoid having a short and long position within a single investment fund or a geographic limit on loans within a certain category or geography.

BETTER DATA ALSO MEANS BETTER OVERSIGHT

GLM and analytics are among the tools being used in financial services companies to track details that might otherwise go unnoticed – by both regulatory agencies or by corporate policy, notes Vikas Agarwal of Ernst & Young. He works on compliance and oversight projects and said clients are recognizing how well analysis of existing data can report on patterns or conflicts of interest that even employees may be intention or coincidental. For instance, he said, a person’s travel or gift and entertainment records can be correlated with trading or contract awards – illustrating when and how actions (purchases, sales, allocation of trades) are affected by external activity.

This level of transparency has been difficult, if not impossible, in the past but now it can be automated by using line-of-business rules and logic that automatically notifies relevant executives of an action that might be suspicious. Agarwal said the Securities & Exchange Commission and Office of the Comptroller of the Currency are among the federal regulators using these kinds of tools to see more quickly how actions compare to reports – instead of waiting for a breach, a failure or other issue that has large repercussions.  An example is the failure of Barings Bank because of improper buying and selling or the scandal at Societe Generale blamed on a trader who was violating rules.  Another example is seeing when someone’s corporate email or trading accounts show activity even when the person is supposed to be on vacation or away from the office.

Look for more details from this program — and more about analytics tools used for reinsurance, marketing and new features for Spotfire and tablet devices.

David Wallace
Spotfire Blogging Team

Image Credit: Getty Images