The need to offer personalisation in financial research

Research is a fundamental aspect of financial decision-making, yet, all too often its use is through a one-size-fits-all method. In today’s complex global market, this generalised approach isn’t enough, and with increasing capabilities for using technology, a lack of personalised output is a loss of opportunity.

For example, a portfolio manager may be looking to invest in a variety of manufacturers who are most likely to benefit from the electric vehicle revolution. In conducting research, there may be a need to gather analysis on a wide variety of subjects, from energy storage system (ESS) battery manufacturers, to the global supply of lithium, the proliferation of fast charging points, and consumer range-anxiety. This would entail ploughing through a wide variety of documents for numerous words and acronyms, yet the risk is that a key paragraph may be missed in the large volume of reports.

Automation and other aspects of innovation may be a mainstay of many areas of finance, but technological advancement in research has lagged far behind. Consequently, slow progress and an absence of personalisation mean that the use of financial research is out of step with the way other operations are now conducted.

Are you maximising your research production?

An analyst firm may know what its clients are interested in, but if there is no ability to only surface or distribute the precise topics the readers are interested in, the material will remain generic and have only limited value. Using our electric vehicle investment scenario, there may be a key paragraph on lithium reserves in a 40-page country report which the portfolio manager may not have thought of looking at, or may not have identified even if it had been opened, due to the sheer volume of information within the report.

How much better would it be if the analyst house could break down its research into its component parts and send only the relevant paragraphs to that particular recipient? It could also send other associated paragraphs relating to electric vehicles making the email hugely personalised to the market participant’s requirements.

It is this ability to customise output into specific levels of granularity that will allow the research producer to better service its clients. Consequently, the recipient will be able to assess incoming reports for relevance much more quickly, rather than having to plough through a mass of reports in a cumbersome manner. Naturally, a tightened correlation of supply and demand will enhance the relationship between the research producer and the client.

Human expertise combined with technological capabilities

To make financial research fully fit for purpose and equip the producers with the tools to provide real insights to clients, a combination of technology and human expertise is needed.

Artificial Intelligence (AI), rich Natural Language Processing (NLP) and machine learning tools can assess reports, identify words and phrases and tag those connections quickly. But human interaction can provide knowledge of shifting contexts and nuances in meaning.

An analyst curated taxonomy would know that ‘range-anxiety’ is linked to the selling of electric vehicles, whereas an algorithm may struggle to make the link. Human input in the programming of phrases and synonyms therefore provides optimal outputs.

Knowledge is an evolving situation

In the dissemination and consumption of research, there is both an active and a passive solution.

The active solution is the ability to quickly search a topic which is automatically broadened to a number of related phrases, from fast charging points to consumer range-anxiety, and be immediately provided with the specific paragraphs across a multitude of relevant documents.

In a complementary manner, the passive solution is for the user to choose to be kept up to date by receiving email alerts on any additional recent paragraphs. As findings made yesterday may become obsolete by a new announcement made an hour ago, the currency of information is vital.

Ultimately, for a producer’s financial research to be effective and offer value for money, it needs to be disseminated in a customised manner to provide personalised insights for clients.

By Rowland Park and Simon Gregory, co-Founders of Limeglass