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need to be used later. Tat makes the structuring of data into tables, a necessary formatting process for use in databases, impossible.
“Tere is a lot of unstructured data in finance that doesn’t fit with the standard relational technology,” says Louis Lovas, director of solutions at OneMarketData.(OMD) “Te big relational vendors are nowhere to be found at the quant houses and big banks because their technologies do not fit. And there are a number of reasons why they don’t fit. In commercial industry big data is defined by the adage of the three V’s – volume, velocity and variety, a somewhat nebulous description relating to unstructured social content. In that context of social big data the goal is judging human behaviours, mood shifts and buying patterns. Tere is a disquieting alchemy behind the social science in the hunt for business benefit within the glut of data. Te analysis involves not only what data to keep, but what to throw away.”
He continues, “By contrast, within finance the big data definition is much more precise since there is need for reliability, accuracy and timeliness. FX itself represents the world’s largest and most liquid market exceeding $4 trillion daily turnover. Unlike any other asset class, the global currency market ‘never sleeps’. FX clearly fits well within big data’s high-volume definition.”
The most valuable asset
Being sure in a business based on trading risk for capital is crucial, and as they say in the army ‘Time spent on reconnaissance is never wasted.’
“Reliable and accurate data is the ultimate driving force in all capital markets transactions,” says Paul Kennedy, business manager, reference data at Interactive Data. “Firms talk about cleaning or scrubbing data which is almost a religious issue as it is about individual versions of the truth. Do you have a supplier whose information you trust? Have you got an automated intelligence system to check if a price comes in that it is the price you are expecting; is it within the standard deviation of the last one? Is it a price and not a piece of text? How do I avoid the fat finger syndrome that you often get with order management systems?”
He believes the greatest challenge at the moment is that although firms have to understand whether the data they have is accurate, the business is being
Louis Lovas
“Big Data is about the capture and storage of deep data and linking disparate data sets under some common thread to tease out an intelligible answer, a diamond from a mountain of coal.”
buffeted by three winds of change: technology, cost constraints and the parallel search for profitability. Te ability to generate and manage these massive data sets, with nano-second response times is a huge potential advantage but spending on the systems clashes with the tough business environment and tight spreads that characterise the market. Automation is one option firms can look at to keep their costs down.
Some of this technology is being adapted from other industries; the Hadoop data management system is an open source platform, based on a white paper Google released in 2004 detailing its MapReduce data management model. HSBC and Bank of America Merrill Lynch are both investigating its potential at present. By storing data in chunks that are not related, across an architecture of networked computers, it can be searched more flexibly and without the need to load and unload it into a database. Te use of computers operating in parallel allows processing to occur at a much faster pace. Tere are also more established commercial options available.
“Big Data platforms like OneTick provide a premiere solution for large scale FX data management,” says
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