Fund Forum: Investors empowered by data
06 June 2016 Berlin
Image: Shutterstock
Fund managers should embrace data management as one of their core competencies, according to the out-of-industry keynote speaker at Fund Forum International in Berlin.
Andreas Weigend, former chief science officer at Amazon, a lecturer at the University of Berkeley and director of Social Data Lab, focused on data and client decision-making, pointing out that with the huge amount of information that smartphones provide, fund managers can assume the majority of client data they’re interested in is already available, somewhere.
Using the example of Uber, which may not consider itself to be a data-centric company, Weigend argued that it is in fact just that. Uber changed the way that data is used in the taxi industry. Instead of consumers using data to find a cab, the data is used for bringing cabs to them. The same can be true of the fund industry, according to Weigend.
Weigend also noted that social data is important, and that many people still base their decisions on recommendations from friends and family, even regarding something such as finance that should, in theory, be objective.
“We move from a data set to a tool set to a skill set … but the most important one is a mindset,” he said, adding that this mindset “is what needs to be brought into organisations”.
With this in mind, Weigend outlined a ‘digital bill of rights’ that should be available to investors.
First, investors should have a “right to access data”, without institutions charging for access to historic data. They should also have the right to inspect the data refineries, and particularly to their security audits. Clients should know how rigorously their data is protected, and what they get in return for providing data.
The other rights are based around “increasing user agency, because just getting insights isn’t enough,” Weigend said.
Investors should have the right to amend any data, and to view data on the fund manager that has been amended; the right to ‘blur’, or choose how specific particular data is; the right to play, or experiment with different scenarios to discover their own risk tolerance; and the right to port, or to move, data from one place to another.
Finally, Weigend questioned whether clients are aware of the value that they can get from providing their data in the first place, noting that “the balance of power is shifting from companies to individuals”.
In fund management, he said, this is the direction that consumers should be moving in. He said: “Your core competency should be data, and those applications go towards sources for alpha.”
Andreas Weigend, former chief science officer at Amazon, a lecturer at the University of Berkeley and director of Social Data Lab, focused on data and client decision-making, pointing out that with the huge amount of information that smartphones provide, fund managers can assume the majority of client data they’re interested in is already available, somewhere.
Using the example of Uber, which may not consider itself to be a data-centric company, Weigend argued that it is in fact just that. Uber changed the way that data is used in the taxi industry. Instead of consumers using data to find a cab, the data is used for bringing cabs to them. The same can be true of the fund industry, according to Weigend.
Weigend also noted that social data is important, and that many people still base their decisions on recommendations from friends and family, even regarding something such as finance that should, in theory, be objective.
“We move from a data set to a tool set to a skill set … but the most important one is a mindset,” he said, adding that this mindset “is what needs to be brought into organisations”.
With this in mind, Weigend outlined a ‘digital bill of rights’ that should be available to investors.
First, investors should have a “right to access data”, without institutions charging for access to historic data. They should also have the right to inspect the data refineries, and particularly to their security audits. Clients should know how rigorously their data is protected, and what they get in return for providing data.
The other rights are based around “increasing user agency, because just getting insights isn’t enough,” Weigend said.
Investors should have the right to amend any data, and to view data on the fund manager that has been amended; the right to ‘blur’, or choose how specific particular data is; the right to play, or experiment with different scenarios to discover their own risk tolerance; and the right to port, or to move, data from one place to another.
Finally, Weigend questioned whether clients are aware of the value that they can get from providing their data in the first place, noting that “the balance of power is shifting from companies to individuals”.
In fund management, he said, this is the direction that consumers should be moving in. He said: “Your core competency should be data, and those applications go towards sources for alpha.”
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