Financial institutions have become data hoarders
Banks, hedge funds, and asset managers have become data hoarders. However, many of these firms find it difficult to make use of all of this data. They need tools that can be used to extract information from various internal unstructured content and to democratise its use: legal documents, emails, instant messages, news archives, analyst reports etc.
An increasing number of firms are now embracing the cloud making it easier for vendors to come in and analyse proprietary content on their behalf. This new trend is primarily driven by the more sophisticated hedge funds and assets managers, since banks are often more restricted by their compliance.
But it is challenging to make use of that data. Big data craze inspires firms to save every possible bit of data, with the misconception that the more data you have, the better. Firms must keep data (for compliance purposes) or often aren’t sure what information they need to keep. Having more data is not necessarily a good thing when you are not sure how it is going to accumulate or how to manage the data. There is hope that data hoarding, however, will eventually bear fruits when it comes to alpha generation - with the right help that is!