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How can research analysts innovate through data?

Leon Saunders Calvert
Leon Saunders Calvert
Head of Research & Portfolio Management

Finding the signal within the noise is becoming increasingly challenging for research analysts. Research commissioned by Refinitiv shows how new ways of working with data can help generate actionable insights, improve productivity, and meet the challenges of ESG investing.

  1. Research analysts want new tools and ways of working with data to meet a wide range of challenges, including those posed by ESG.
  2. Crucially, analysts need easier ways of commingling data from multiple sources – essential for reports such as portfolio carbon footprint analysis, but also for boosting productivity and allowing analysts to broaden their coverage.
  3. Buy-side analysts have been quick to adopt coding as a way to take analysis to the next level; sell-side analysts show enthusiasm to learn, partly to help career prospects and partly to generate greater revenues and reduce routine work.

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The rise of index-tracking funds has put conventional investment advice under enormous pressure, with all job functions tasked to show they add value to the investment process.

Our new report, Workspace Without Limits, addresses research analysts as a profession where complex data crunching is both a challenge and opportunity.

The survey shows how financial organisations are accelerating their digital transformation, requiring professionals to do more with the increasing amounts of data they can access: 76 percent of analysts say their organisation expects them to be better at handling complex data.

Workspace without limits: examining the role that technology, interoperability and programming skills play in powering productivity within financial institutions

Watch: Workspace Without Limits – New Insights for Research Analysts

The shift towards sustainable investing

Sustainable investing strategies now make up over 30 percent of global assets under management, and data plays a pivotal role in the investment decision-making process.

Over 50 percent of research analysts surveyed consider sustainable investing to be the biggest area of opportunity when it comes to new workflow tools and ways of working.

Wnat would buy-side and sell-side research analysts do with new ways of working data?

One factor linking these is the need to handle large data sets, often combining data from multiple commercial providers and perhaps data sets generated internally.

Forty percent of analysts say they suffer delays when consolidating proprietary data with third-party data, while 37 percent say they delayed when swapping between platforms, channels and tools. Add to this the fact that more than one in five analysts say they use 16 or more apps at work, and it becomes increasingly clear that solutions are needed to streamline workflows.

While increased productivity has the benefit of allowing coverage universes to be expanded, it also opens the door to more insightful analysis; analysts typically say just 11 percent to 20 percent of their day is spent on generating new ideas. Automating routine tasks could increase this percentage, potentially improving the returns of their clients or funds.

Research analysts see building models using programming as a way to advance their workflow.

Enthusiasm for change among research analysts

For many analysts, workflows of the future will involve building models using coding, rather than Excel and other tools.

Buy-side analysts are pathfinders here: 43 percent say they already use coding in their job, higher than any other job function. (For sell-side analysts, the figure is just 16 percent.)

However, even for those not yet coding, the appetite for learning is high. Among sell-side analysts that don’t code, 56 percent are either learning or would like to start.

Career prospects are a clear motivator, as 76 percent of all analysts say they need to improve their coding skills to progress in their current job.

To this end, we are adapting and translating all our financial model templates into Codebook, our desktop API and environment for working with our data in Python script, and enabling superior proprietary data integration into our platform.

To dive deeper into the research and find out how financial firms can avoid being ‘data rich but insight poor’, download our Workspace Without Limits report.

Workspace without limits: how can research analysts derive greater insight from financial data and tools?