Tailored and specialized data intelligence can change the face of trading today, and this is exactly what analytics brings with it. Capital market firms are now prioritizing investment in analytical capabilities through digital solutions, as well as the data scientists and analytics experts. With electronic trading becoming the new convention, streams of data have multiplied significantly. For trading firms to be able to capitalize on this data and understand underlying patterns, smart analytics capabilities have become indispensable. The benefits of smart analytics in capital markets extend from cost-effectiveness to real-time trade optimizations.
While big data includes vast datasets, smart data can be defined as a narrower set of data which trading firms derive from multiple sources that are updated in real-time and standardized simultaneously. The source for smart data varies from firm-specific historical data to raw transaction data from markets. Compared to big data sources, smart data offer more targeted and accurate insights when analytics tools are used on these. With smart analytics solutions, trading firms and investment banks have the opportunity to process smart data and deliver actionable intelligence. Capital market companies can access intelligence through the dashboards and graphical user interfaces that have become an integral part of smart analytics solutions today.
While smart analytics offer attractive benefits for trading firms, there are many challenges that need to be overcome for the effective utilization of smart analytics. Legacy models that offer siloed data capture and management need to be replaced with systems that have relevant architecture. The use of API stacks for the sharing of data is an emerging solution. Thus, by innovative ways to link data sources, capital market firms can optimize data architecture that favors smart analytics.
As an alternative to the API approach, vendor-provided smart analytics solutions have increased the prospects of capital market firms leveraging the technology in recent years. Through scalable solutions that give traders and C-level executives the ability to see through smart data, smart analytics have contributed significantly to the intelligence in trading.