State Street Unveils New Quant-based Research Management Solution

Sep 20 2017 | 8:22pm ET

Global financial services giant State Street is launching a new service that will combine the advantages of machine learning technology with the knowledge and experience of human experts.

The new service, named the Quantextual Idea Lab, is aimed squarely at addressing the information overload that confronts investment professionals every day, the company said. For perspective, State Street added that top financial research teams produce enough content to consume 24 reams – that’s 12,000 sheets – of paper per day.

The new Quantextual Idea Lab allows investment teams to search all of their research and focus on relevant information, freeing them and their staff up to focus on higher value-add activities for clients. Moreover, Quantextual closely tracks research consumption, which in turn will help them to optimize their research spend under regulations like MiFID II.

The new module is part of the next generation of intelligent client solutions developed by State Street Global Exchange, the company’s data and analytics business. It uses machine learning algorithms to consume complex research reports, tag them by investment themes and assets, and suggest new, relevant materials based on the user’s specific needs, preferences and observed reading behavior. Quantextual then overlays the experience and market knowledge of its own research team to continuously improve the algorithms’ performance and accuracy, State Street said. 

“Through Quantextual, we’ve designed a workflow that empowers the transformation of carefully curated ideas into decisive and strategic action,” said Stephen Lawrence, head of Quantextual Research for State Street Global Exchange, in an email. “As more investment firms shift to a model of covering research costs out of their own P&L’s, an additional benefit of Quantextual is that it allows them to systematically review research consumption, to help them optimize their research spend.”

Boston-based State Street is one of the world's leading providers of financial services to institutional investors. The company, which provides a broad suite of investment servicing, investment management and investment research & trading products to clients worldwide, had $31 trillion in assets under custody and administration and $2.61 trillion in assets under management as of June 30, 2017.

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