New technologies changing asset management

Key Takeaways

  • Each second, oceans of new data are being generated by the internet, smartphones, satellites and other innovations. This data is commonly referred to as “Big Data” or “alternative data.”
  • Many asset managers are seeking to harness the power of Big Data by using technologies like natural language processing, image recognition and machine learning to analyze it and find investment insights.
  • BlackRock’s Systematic Active Equity investment team has been using these technologies to analyze alternative data for more than a decade. Over this time, the team has learned four key lessons that can help effectively use these technologies within an investment process.

 


Four lessons for asset managers that seek to incorporate Big Data in their investment process:

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Lesson 1
There needs to be lots of data sources, as well as the “right” data.
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Lesson 2
Technologies like machine learning must be paired with the dedicated expertise to use them.
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Lesson 3
An investment team’s technology may lose its edge without constant innovation.
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Lesson 4
Innovation is dependent on a collaborative team culture, which needs to be developed over time.