Refinitiv Labs focus on harnessing the power of Big Data and Machine Learning (ML) to drive the innovation that will shape the future of financial services. Here, Geoff Horrell, Director of Refinitiv Labs, London, shares three key themes and trends that are set to shape the industry in the year ahead. This is part of our ‘Views on 2020’ series of blogs.
- Unprecedented scale and power are readily available through the cloud, and firms of all sizes can access next generation databases, streaming technology and ML models via open sources.
- Changing business models are opening up significant new opportunities for companies. For example, seven of the world’s largest global companies in 2018 – including household names like Apple, Google and Amazon – were platform businesses.
- Today’s tech-savvy customers expect a frictionless, high quality experience in every aspect of their business interactions. This has led to a significant growth in mass personalization in the customer experience arena, a trend that we expect to continue into 2020 and beyond.
1. Tech flattening levels the playing field
The technology landscape has already shifted beyond all recognition, with the smallest of fintechs now able to access the same tools and technology as the largest of banks. Unprecedented scale and power are readily available through the cloud, and firms of all sizes can access next generation databases, streaming technology and ML models via open sources.
Two examples of significant support backing this trend include:
- Google’s 2018 open sourcing of BERT, the jovially titled breakthrough deep learning model for language processing that has already been downloaded over 20,000 times and is actively being enhanced by 4,500 developers across the globe[1], and
- Microsoft’s donation into open source of 60,000 patents for Linux[2] after announcing plans to join the Open Invention Network[3]. Linux is the operating system underlying everything from mobile phones to the cloud. In one recent deal, IBM concluded its biggest ever acquisition when it bought RedHat for $34bn in 2019, signalling its clear belief in the power of Linux, which is integral to RedHat[4].
A Refinitiv Labs project which is actively employing open source capabilities is Project Mosaic – a new innovation which explains extreme price moves using real-time analytics and ML. Mosaic combines Refinitiv news sentiment, social media, events and pricing data with Google’s cloud platform, many open source components such as Kafka, Flink & Beam for streaming data and a third-party charting application called TradingView[5].
‘These and other developments have had a flattening and accelerating effect in the technology space,’ says Geoff. ‘We expect this trend to continue strongly into 2020, further leveling the playing field for all market participants.’
2. Changing business models bring opportunity
Changing business models are opening up significant new opportunities for companies. For example, seven of the world’s largest global companies in 2018 – including household names like Apple, Google and Amazon – were platform businesses[6].
The emergence and rapid growth of these new players has vastly altered the landscape – the average age of an S&P500 company has fallen from 60 years in the 1950s to 20 years today, with the average for a platform model company recorded as 28 years[7].
A pertinent example is that of WeChat, the 2011 start-up that began by offering a free consumer chat service, and now boasts 1 billion users; handles 40% of mobile payments in China; and has 880 commercial partners, with more than 1 million active users building their businesses via the app.
Successful platform businesses must first build scale and communities before monetising the servicing of those communities at a later stage. At Refinitiv we actively embrace business models that deliver large scale community growth into new areas and our Labs remain deeply committed to promoting this ambitious thinking whilst continually helping our customers to solve challenges in a changing environment. For example, our Data Science Accelerator provides quality sample data sets, example notebooks and documentation for data scientists to explore, validate and perfect their own ML models.
Geoff elaborates, ‘We currently have 40 companies trialing the service, and have run hackathons for more than 1,000 people with some of the world’s largest banks. As 2020 unfolds, we will continue to push the boundaries of technological innovation in response to dynamic business models and changing customer needs.’
3. Highly personalized customer experiences drive revenue
Today’s tech-savvy customers expect a frictionless, high quality experience in every aspect of their business interactions. This has led to a significant growth in mass personalization in the customer experience arena, a trend that we expect to continue into 2020 and beyond.
McKinsey reports that ‘today’s personalization leaders have found proven ways to drive 5 to 15 percent increases in revenue’[8], a clear indication of the power of well-executed personalization efforts.
As personalization continues to grow, so will investment into natural language processing (NLP), with the Chatbot industry expected to grow from $1.17b in 2018 to an anticipated $10b by 2026, at a CAGR of 31%.
Refinitiv Labs are committed to delivering better, more personal customer experiences, and therefore adopt a highly collaborative approach that speaks directly to each customer’s specific needs and circumstances.
The team actively embraces design thinking in order to promote better user experiences – this approach breaks the mold of traditional solution development and delivery, putting customer needs and wants front and center and designing innovative solutions that solve real-world customer challenges.
Geoff stresses the importance of a customer-centric approach: ‘We begin each new relationship by developing a thorough understanding of that customer’s unique needs. We then iterate rapidly, actively incorporating customer feedback and providing real applications for teams to work with early in the game. It’s this deep collaboration that yields tangible value and allows us to drive innovation for the benefit of the industry as a whole.’
[1] https://ai.googleblog.com/2018/11/open-sourcing-bert-state-of-art-pre.html
[2] https://www.wired.com/2016/08/linux-took-web-now-taking-world/
[3] https://www.computing.co.uk/ctg/news/3064361/microsoft-donates-60-000-patents-to-open-source-as-it-joins-open-invention-network/
[4] https://www.zdnet.com/article/how-the-cloud-wars-forced-ibm-to-buy-red-hat-for-34-billion/,
[5] https://kafka.apache.org/; https://flink.apache.org/; https://beam.apache.org/; https://www.tradingview.com/
[6] https://innovator.news/the-platform-economy-3c09439b56/
[7] https://www.applicoinc.com/blog/life-span-of-sp-500-companies-is-going-down/
[8] https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-future-of-personalization-and-how-to-get-ready-for-it/