State Street Global Exchange (SSGX), a division of State Street that provides asset owners and asset managers with services driven by data analytics, is relocating its Asia managers to Singapore with the launch of a research product.
State Street’s institutional businesses – its fund and securities services business, its broker/dealer, and its asset management business – remain headquartered in Hong Kong. But the SSGX unit is making the shift in order to support the launch of a service using machine learning to identify research useful to clients, Gerard told DigFin.
The product, Quantextual, sifts through the more than 2,500 research papers published every year that are aimed at helping asset owners and fund managers align portfolios, rebalance positions, and design products. No human or team of people can digest all of that. Quantextual combines machine learning, developed over the past two years, with SSGX’s human expertise to put the most relevant and actionable research in clients’ hands.
“We are the Yelp of research,” Gerard said, referring to the crowdsourced-reviews app. Quantextual allows users to score the quality and relevance of third-party academic papers. It also highlights the most popular academic output in the most recent quarter.
“We serve as a bridge between academia and actual projects,” Gerard said. The goal is to help clients address issues such as home bias in the portfolio, how to rebalance, and how to optimize strategic asset allocation.
The service launched worldwide at the end of September, based on State Street’s in-house research centers in the U.S. and the U.K.
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In Asia, the firm decided that Singapore was a better place to be for several reasons.
First, the provision of financial research happens in a regulated environment, and the firm found regulators in Singapore and Australia prepared to understand how its activities can be licensed.
Second, those two markets are where SSGX expects to do the most business, partly because of SSGX’s own English-language culture.
Third, Singapore’s government is making a concerted push toward a digitalized society, and it was the most receptive to SSGX’s data-driven business model.
For now, the service is focused on third-party academic research. But the computer can screen, catalogue and filter any kind of data. So SSGX could branch into brokerage research, market sentiment data, or other services, depending on client demand.