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Using Data to Drive Investment Strategies

By Hasan Rauf, DTCC Head/Executive Director – Business Development, Asia Pacific | June 22, 2020

Today, “data is the new oil” is a common refrain among the ranks of data scientists. It reflects the awareness that, when processed and analyzed intelligently, data is tremendously valuable. In our data-driven business culture, firms can use data to anticipate economic and client demands, offer differentiated services and diversify their investment strategies. And, as we’ve seen during the coronavirus pandemic, targeted and timely data is critical in driving decision making.

Fittingly, institutional investment firms in Asia are on an ongoing search for the data that can help fuel their strategies and objectives. In this competitive landscape, we are seeing demand for deeper market insights, leading to increasing amounts of data being mined from various sources.

Facing headwinds resulting from regulatory, operational and revenue challenges, institutional investors in Asia – investment managers, hedge funds, wealth managers and others – are under tremendous pressure to leverage innovative technology and data to maximize returns while minimizing risk exposure.

Extract and Refine Data for Actionable Insights

With more data being digitized, the opportunity now exists for data researchers to slice and dice timely and relevant raw data to help institutional investors in Asia better understand changes in market sentiment, as well as identify bullish or bearish signals, so they can deliver actionable investment insights.

Specifically, data should provide accurate and comprehensive coverage to facilitate analysis of institutional buy-side and sell-side market activities and trends. Depending on how data is collected, categorized and summarized, historical and real-time information could be at data researchers’ disposal to enable greater insights on both industry benchmark performance and the behavior of the financial markets over a certain time period.

Of critical importance to institutional investors are broad, historical data sets that describe the trading activity, concentration of liquidity and other investment patterns to help determine salient trading trends and market risk indicators that may not have been obvious in the past. The knowledge gained may drive the next generation of quantitative trading analysis – supported by sophisticated mathematical computations.

The analysis of such data may enable institutional investors to gain enhanced intelligence on price movements and trends across select market segments and asset classes. These comprehensive market and reference data tools can help boost the capabilities of institutional investors when fed into proprietary sentiment models and used with advanced technologies and analytics tools to provide more insightful analysis.

As data can be sourced and collected from numerous data providers – some with the promise of having the world’s largest database – having access to trusted, relevant and timely data sets across multiple trading platforms can be challenging.

Utilize Trusted Data Sources

Because of their market share and extensive coverage of the financial services community, trading venues and market infrastructure providers offer in-depth experience in data collection across multiple asset classes. With their exposure to a wide spectrum of investment activities, they are well positioned to develop data products that can help regional institutional investors develop a new generation of investment models that will improve portfolio performance and give them a competitive edge.



Hasan Rauf - Connection Bio
Hasan Rauf Executive Director and Head of Business Development – Asia Pacific