With an average of $6.6tn of trades per day, the FX market underpins many investments and all international capital flows. The ability to make or advise on appropriate transactions depends upon participants having access to the right information at the right time.
There are two sides to the coin. Firstly, for research publishers, it is imperative that their material reaches their audiences, and is read. Delivery is required in an appropriate and easily digestible manner, making their output an integral part of their clients’ operations. Secondly, for report recipients, it is imperative that they can access the relevant information and gain insights upon which to make informed choices and provide suitable advice and thus differentiated value for their clients’ end goals.
Whether producing or reading research, time is often limited, however, information is vast, with snippets of high-value information buried deep in documents. So how can the two be correlated effectively?
This can only be done if FX risk managers and sales teams are able to smartly access information, fully capitalising on the intelligence they receive via research reports and news articles. Banks and other financial institutions produce and receive hundreds of pages of research each day, yet these reports are seldom used to their optimal value.
Optimisation of research at key working moments is vital, yet this is not often possible, due to the incumbent search methods. For example, when an analyst or portfolio manager is researching information to potentially rebalance weighting of a fund, when a salesperson is responding to a client query, or supporting a client with the execution of a trade, traditional search methods such as scrolling through an email inbox or using Control+F on a text document obstruct commercial opportunity. The continuous high volume of reports combined with the multiplicity of sources to try and glean value from makes this a largely inefficient and frustrating process, making it difficult even for experts to be truly knowledgeable in many areas at once.
The issue is exacerbated as keyword-based searches produce very narrow ineffective results, as other relevant words and phrases within the context of the subject will be missed. For example, a search on the ‘pound to dollar rate’ would only reveal sections of reports that referred to those particular words; other sections containing words and phrases such as ‘sterling’, ‘cable’, ‘greenback’ and ‘GBP/USD’ or simply ‘GBP’ would not be revealed. Moreover, adjacent contextual references to topics that affect the FX market, including the current UK interest rate or latest announcement by the US Federal Reserve would also be missed.
As an example, imagine you get a call from a client asking for relevant information concerning the morning’s drop in the AUD price: you’d want to answer the query with accurate, timely information about the cause, along with announcements from the Reserve Bank of Australia’s (RBA) Governor stating what was said, the RBA international reserves portfolio, and other influencing factors. Additionally, you would also want to quickly access information about previous recent dramatic prices moves and research that has been undertaken on them. If you’re not able to respond quickly and accurately, you may inadvertently impede your client’s decision-making and thus negatively impact the client relationship.