Tibco: Getting value from 21st century analytics in Financial Services

Companies in the financial services industry are awash with ever increasing volumes of dynamically changing data, for example relating to financial markets, customers, trades, positions, business operations, products, portfolios, assets and liabilities. All companies have systems, tools and applications that use the data to help them understand and run their business effectively, manage risk and maximise profits. However, many of the systems and applications, for example risk management, trading, portfolio management, core banking, sales and marketing, whilst good at what they were specifically designed to do lack flexibility when it comes to providing information and analysis for users. Furthermore, traditional business intelligence (BI) tools only provide the answers to pre-determined questions and users are constrained by the designs of cubes and interfaces when they try to truly understand and analyse the data.

So it is not easy for people in financial services companies to gain insights that are timely and outside of the box, and to take decisions and actions that will give them a competitive advantage. The most common analytics tool in financial services is in fact the spreadsheet, which of course has its merits, but is hardly state of the art when it comes to rapidly gaining unique insights.

Today, we can use advanced 21^st century analytic techniques to rapidly gain insights from vast amounts of data. In this article I will touch on three of the techniques that offer real benefits to financial services companies:

• In memory dynamic visualisation
• Free dimensional self -service
• Integrated statistics and visualisation

The TIBCO Spotfire visual analytics platform features all of these advanced techniques in a uniquely compelling user experience and is delivering real advantage to financial services companies around the world.

In memory dynamic visualisation

More and more, business professionals have rich, visual, interactive user experiences with computer software outside the office. As a result, the people who increasingly make critical decisions in organizations have an entirely different expectation for human-computer interactions. Business professionals who play video games or spend time searching the Internet at home expect more than plodding form-intensive interfaces found at work.

Will game-like experiences be the norm in future business software? The answer is increasingly "yes".  The problem with traditional business software is that unlike game software, it is not typically optimized for how the user experiences the information. Instead, it is designed to optimize navigating the features of the software. However, humans best process and intuit information by seeing and interacting with data and exploring patterns and relationships.

In financial services interactive visualisation is a powerful technique in risk management, portfolio management and attribution, client reporting, trade execution analysis, trading competitiveness and understanding business performance. TIBCO Spotfire is making a real difference today in all of these areas. TIBCO Spotfire applies the principles of game-like user experiences to data analysis: visual, interactive, immediate, and contextual. Just as the games are optimized for players, TIBCO Spotfire software is optimized for people and discovery rather than reporting.

Free dimensional self -service

Consider a typical BI systems report. Getting one produced by IT - asking the right questions in the right ways, isolating the right information, formatting it for delivery - is painful in its own right. Once delivered what is the typical user experience? In most modern BI systems the designers have anticipated that the user will have some immediate additional questions.

But is that how a game works? No. Presented with a fork in the road the game user can go back, forward down either fork, or explore their surroundings.

Many analytic needs in financial services are best met through this free approach, examples being credit and counterparty risk management, forensic auditing, trade surveillance and fraud detection. These applications require the analyst to either put themselves in the shoes of a rogue trader, or simulate errant and unexpected risk factors.  A rigid and pre-calculated set of measures or metrics can be quite limiting.  TIBCO Spotfire is a powerful self service solution for these needs. It leverages contemporary, high speed, real-time technologies and in-memory processing to blow away traditional BI design limitations that still require the well structured queries and hierarchies based on known dimensions and measures. 

Integrated statistics and visualisation

Visualisation in itself is powerful, but in many areas of financial services there is a need to apply advanced statistics. A challenge with the abstract world of quantitative finance is that it can be very hard for business decision makers to understand what the numbers mean and how they relate to their business. This is further exacerbated by the fact that some outputs from statistical models are not static, they are based on probabilities, and are sensitive to changes in the model inputs. Quant teams therefore use graphical tools to present their work which is fine until someone in the business asks a follow-up question that requires a model to be re-run with different inputs or parameters. The problem is that most BI tools are not integrated with statistical modelling tools, and few statistical modelling tools support interactive visualisation.

In financial services there are  a number of areas that are best served by a combination of the human mind, assisted by visualisation, and the rigor of advanced statistics, for example, capital modelling and capital allocation, risk aggregation, stress testing and scenario analysis. TIBCO Spotfire's interactive visualisations are seamlessly integrated with the TIBCO Spotfire S+ and R (open source) statistical programming languages. This allows users to make interactive changes to parameters and visual selections, have the statistical models automatically re-run in the background, and the visualisations automatically updated on their screen.

In Conclusion

21^st century analytics, specifically in memory dynamic visualisation, free dimensional self-service and integrated statistics and visualisation, combined in a compelling game like user experience gives companies in the financial services industry the opportunity to quickly gain insights into large volumes of changing data, and to make decisions that result in competitive advantage. TIBCO Spotfire is a leading platform in 21^st century analytics and across the world companies that use it see benefits every day.

About

Brian Perfect is an IT industry veteran with over 25 years experience primarily in the financial services vertical. Today he is Director of Financial Services Industry Sales, EMEA at TIBCO Spotfire and prior to that was Director of Sales, EMEA for Insightful, which was acquired by TIBCO in 2008.