Getting value from 21st century analytics in financial services

TIBCO Spotfire’s Brian Perferct asks, will game-like experiences become the norm in future business software?

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 to help, however, many of these whilst good at what they were specifically designed to do lack flexibility. Furthermore, traditional business intelligence (BI) tools only provide the answers to pre-determined questions. 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.

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; and integrated statistics and visualisation.

In memory dynamic visualisation

More and more, business professionals have rich, visual, interactive user experiences with computer games 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.

Will game-like experiences be the norm in future business software? The answer is increasingly "yes" since it makes the user more effective.

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 by applying the principles of game-like user experiences.

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. Even then it is fixed. 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. TIBCO Spotfire is a powerful self-service solution for these needs blowing away traditional BI design limitations.

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. 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.

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 provides this, its interactive visualisations are seamlessly integrated with the TIBCO Spotfire S+ and R (open source) statistical programming languages.

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.