Big Data Could Have a Transformational Influence on the 21st Century Global Financial System, According to BNY Mellon

NEW YORK and LONDON, May 9, 2013 /PRNewswire/ -- New analytical approaches combined with the arrival of torrents of big data have the potential to shape a healthier and more prosperous future for the information-intensive global financial system, according to a white paper from BNY Mellon.

The paper was written by Jack Malvey, chief global markets strategist for BNY Mellon Investment Management and director of the BNY Mellon's Center for Global Investment & Market Intelligence (CGIMI); Ashish Shrowty, managing director, BNY Mellon corporate technology; and Lale Akoner, investment analyst, CGIMI.

The paper, A First Perspective: The Transformational Influence of "Big Data" on the 21st Century Global Financial System, predicts the financial system in the early 21st century likely will evolve even more quickly than it did in the late 20th century. Big data will lead to new approaches in all phases of financial markets, including asset management, research, analytics, asset allocation, trading, and risk management, according to the report.  For example, fundamental equity and credit analyses likely will become even more granular in detail and lead to greater emphasis on issuer differentiation.

The report suggests that big data could make markets so efficient that active investment managers will need to find new outperformance methods.  Well-known risks to investors such as surprising economic data releases and disappointing corporate earnings could give way to new ones such as interruptions in the data highway, according to the report.

"Will other unintended effects of big data be discovered?" asked Malvey, who questions if the quality of some financial decisions will keep pace with the stream of growing data.  "As technology makes broader and deeper decisions, financial decision-making accountability may need to move beyond the realm of financial experts to diverse teams that include data scientists." 

Superior information can lead to more decisions based on evidence instead of intuition, according to the report.  However, the report notes that such conclusions are not guaranteed.

"The advancing utilization of big data in the early 21st century will be recalled as a very big plus for the global financial system," said Malvey. "In our opinion, this will be a major positive disrupter in shaping a healthier and more prosperous future for the global financial system."

Notes to Editors:

BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, with $1.4 trillion in assets under management. It encompasses BNY Mellon's affiliated investment management firms, wealth management services and global distribution companies. More information can be found at www.bnymellon.com.

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 36 countries and more than 100 markets. As of March 31, 2013, BNY Mellon had $26.3 trillion in assets under custody and/or administration, and $1.4 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com, or follow us on Twitter @BNYMellon.

All  information source BNY Mellon as of March 31, 2013. This press release is qualified for issuance in the UK and US and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. This press release is issued by BNY Mellon Investment Management (US) and BNY Mellon Asset Management International Limited (ex-US) to members of the financial press and media and the information contained herein should not be construed as investment advice. Past performance is not a guide to future performance.  The value of investments and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements.  When you sell your investment you may get back less than you originally invested. Registered office of BNY Mellon Asset Management International Limited: BNY Mellon Centre, 160 Queen Victoria Street, London, EC4V 4LA. Registered in England no. 1118580. Authorized and regulated by the Financial Services Authority. A BNY Mellon Company.

SOURCE BNY Mellon

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