Feb 11, 2020
Information has always been essential to investors and investment companies. Data gives insights, helps with decision making, increases competitiveness, and reduces risk exposure.
One modern trend that is now firmly taking hold of investors is the fact that all data is useful. The question is not whether the data might be helpful or not but rather how can you collect the data and then make effective use of it.
In fact, those with the most data are often those who are making the best investments.
An important factor in this data trend is that data is so readily available. In fact, it is everywhere and covers just about every conceivable topic.
So, while the availability of data may have been challenging in the past, it is not an issue anymore. However, there are two challenges that exist:
Investors are using technologies to overcome these challenges and are having considerable success in the process.
There are traditional sources of data that investors have always used. Examples include earnings data and other common forms of market data. These are still important datasets for investors to collect.
A lot more data is now available to the modern investor, however. This data is known as alternative data.
Examples of alternative data include search trends, web traffic, consumer transaction data, and social media data. Web scraping is the most popular form of alternative data, however.
Web scraping involves using tools to access, read, and collect data from a range of different sources. Those sources include company websites, other websites on the internet, apps, satellite information, social media, news websites, and more.
Furthermore, web scraping tools enable investment companies to collect huge amounts of data from a vast range of sources because the process is automated. Most large investment companies then use a process called web data integration to aggregate and manage this data from multiple sources in one workflow.
Web scraping gives investors access to a wide range of information. Theoretically, anything that can be found on the internet. This data has the potential to give investors key insights on consumer behavior, market intelligence, trends, and more.
Therefore, web scraped data can be used to backup investment decisions, find new investment opportunities, determine the timing of an investment, and enhance automated trading algorithms.
As mentioned above, collecting data is only one piece of the puzzle for investors. They also need tools to process, analyze and make use of the data collected. For this task, most are turning to AI – Artificial Intelligence.
In particular, investors are using specific AI technologies, namely machine learning, natural language processing (NLP), and deep learning.
These AI technologies are used to process the data collected through web scraping and by other means. Using big data technologies as well as ML and NLP, investors can quickly process massive datasets to produce usable insights.
Practical examples are often the best way to demonstrate the power that AI and web scraping gives to forward-thinking investors:
The tools available to investment companies to gather data, particularly web scraping tools, as well as AI technologies used to process that data, are changing the investment landscape. Those that don’t invest in these technologies risk being left behind.