SemTech Day 3: Focus on Financials
It’s just after 7 a.m. when I go into the conference hall. As I glance at the schedule of presentations, which, like the workday here in California, starts early, I look around and see dozens of people bent over on smartphones, tablets, and improbably, even some 15-inch laptops.
Everyone seems really busy reading email or taking a quick peek at online newspapers, or perhaps, in the case of some Italian tourists, they are just looking at photos taken in Death Valley, a horrible place at the border between California and Nevada, and inexplicably very popular among his countrymen. In any case, regardless of the reason, the picture is a perfect slice of reality given all the ways we enjoy and share information today that would have been unthinkable even 15 years ago.
We have access to such a diverse variety of tools—more than we can actually manage. And we are so overexposed to the so-called information stream that it’s harder for us to access the really important information at the exact moment that it’s actually important. The situation is particularly problematic for companies because being able to effectively control this flood of information provides a unique opportunity to streamline some operations, to obtain a competitive advantage and therefore, higher profits.
There’s obviously a lot of attention paid to any tool or process that can help manage this. And semantic technologies, with their inherent ability to bring order to this chaos and create the conditions for optimal management of the stream—always more important—are designed to become a driver of corporate information management activities.
Perhaps that’s why I appreciate the Semantic Technology Conference organizers’ choice to offer a series of presentations dedicated to different market sectors to highlight the solutions available to address the various problems caused by this explosion of information.
One of the areas where the situation is particularly critical is financial. In this context, the speech that was the most interesting to me was that of Wells Fargo’s David Newman. Newman argues that traditional information management systems are no longer sufficient to effectively manage the continuously growing flow of data. The reasons are varied, and include the fact that the increasing amount of information, without an intelligent filtering system, can lead to higher, unsustainable infrastructure costs. Moreover, the growing tendency of the various business functions to solve this problem by developing solutions calibrated only on their needs, creates a flurry of data silos that do not communicate with each other, which in turn results in duplicated information across various company offices.
As a potential customer, Newman advised technology providers to abandon the technical language and instead, suggested areas where they expect, in the initial phase, the greatest innovations. These areas include customer care, fraud monitoring systems, credit risk management processes, and activities in support of intelligence analysts.
In all these areas, semantic technologies can provide value. First and foremost, they allow more efficient management of information flows, based on the automatic and real-time identification of relevant information, and second, increasing interoperability and data sharing, reducing the side effects of segmentation and making all the information available, regardless of who produced it and where it’s stored.
The presentation of Leo Keller from Blue Ocean offered some very interesting ideas for applications in support of market intelligence. Keller presented the results of some research on the predictability of price fluctuations in shares of a company as a result of information extracted from social media. Among these studies, it is worth mentioning that of Frei, which shows a positive correlation between the number of employee tweets from a certain company and the price of the shares of the same company, but it is unable to demonstrate a correlation between sentiment and price. Similarly, another study by Arthur J. Connor showed no obvious correlation between changes in the number of fans on the company Facebook page and the value of its shares.
Finally, the presentation from Drew Warren of Recognos Financial has shown how the integration of data extracted from the Internet with traditional data sources can benefit in evaluating a company’s credit risk. Internet sources can in fact provide additional information complementary to structured information such as budgets, balance sheets, etc. The integration of standard data with information derived, for example, from analysis of local newspapers, can make it possible to collect additional information that may give a more complete and certainly more current picture of an organization’s degree of risk.
The opportunity to use semantic technology in the financial sector is clearly not limited to the examples described above. Though outside observers believe that will take time to identify which of these solutions can bring higher value to companies.
Author: Luca Scagliarini