STAGES OF THE ANALYTICS JOURNEY WITH MOSAIC SMART DATA
WHERE ARE YOU?
INTELLIGENCE AT YOUR FINGERTIPS
When you consider how many clients that FX desks cover, all with different needs, demands, areas of expertise and areas of focus, this journey can be daunting and complex.
This challenge can be overcome most effectively by engaging a specialist analytics firm to cleanse, normalise and enrich raw transaction data. This provides a consolidated real-time view and analysis of the transactions flowing through the organisation, delivered in a language that financial market professionals can understand.
The ability to use AI and machine learning techniques effectively depends on having access to complete and high-quality data – a challenge that financial institutions rank as in the top three key hurdles to AI implementation.
In order to act seamlessly and efficiently banks have to be able, at the drop of a hat, to answer questions like, who are their best clients? Which asset class is seeing the most business? and many more. The answers to these questions lie in transaction data, real-time analytics and AI, however the vast majority of banks do not have their data in a place where this is even possible.
What this tells us is that banks must address the fundamentals of their data business before expanding onwards into further technological development. The current operating environment is both uncertain and challenging, but a carefully planned programme that combines cutting-edge data analytics and AI technology holds the key to driving growth and turning the tide of decline.
After all, it’s typically during periods of stress where relationships are forged. As a bank, if you’re able to guide a client through the fog of confusion, you will likely have a relationship for life – and AI and machine learning can facilitate this.
Last year at the height of pandemic-induced market volatility, in conjunction with CLS and MUFG, Mosaic Smart Data launched a free data service aimed at helping traders navigate the current market volatility.
Liquidity is one of key variables that everybody in every market depends on to measure stability. FX is no different. With our FXLIQUIDITY tool we were able to use AI and machine learning to gain an understanding of liquidity profiles and how they had shifted pre- and post-COVID. It showed us how much liquidity had diminished and when during a 24-hour period the best liquidity is available.
It showed us that last year, in some FX crosses, liquidity was down more than 50% compared with pre-COVID market conditions. This information can then help a firm guide a particular investor who is looking to mitigate risk through hedging, by telling them the best windows to access the market. This is a great example of the value where AI and machine can add value in stressed market conditions – and testament to this is the interest we had from all corners of the FX market.
In addition to liquidity challenges, as regulations look set to continue to increase over the near future, competent data sets will be critical to allow institutions to manoeuvre the new regulatory landscape while also having a significant impact on profitability from the AI-driven insights that can be delivered as a result of this.
A client recently told us that since deploying our MSX360 platform, their sales team had made 20% more calls, has 22% longer conversations with clients, and this had resulted in significantly more volume. If you’re a salesperson known to have the best information, the client will call you first. It’s that simple.
The next 12 months will be a critical period for all FX trading businesses and partnering with a specialist analytics firm to effectively harness the value locked within data and the potential of AI and machine learning will help ensure an efficient, profitable and productive transition to a data-driven future. Be bold and take action today.