Our key insight embedded in I O T A™ (Investment Operations Transaction Analysis) is the relationship between information latency and portfolio implementation shortfalls. Coupled with our proprietary database of historical observations, I O T A™ enables you to correlate information latency with optimal remediation options, and develop a probabilistic view of the potential improvements in portfolio performance (measured in basis points).
Information latency expresses the inability of people and systems to simultaneously deliver and act on information in a timely manner. The underlying cause of information latency is the effort (both systematic and human) to reliably map and transform the complex syntax and ambiguous semantics of the various transactions that flow both within the firm and with its counterparties. I O T A™'s primary metric is the Data Operability Threshold [DOT] which tracks state changes from STP to non-STP and vice-versa.
Given the dynamic nature of markets and the fleeting nature of opportunities, information latency significantly constrains the ability of an investment manager to deliver the alpha implied in the underlying strategy.
We designed I O T A™ with the following implementation attributes:
MINIMALLY INVASIVE : I O T A™ uses transactional and reference data drawn fom existing sources in the investment manager's operations. Our proprietary analytics then examine the components of these transactions that contribute to information latency.
MAXIMAL EXPLANATORY POWER : I O T A™ generates outcomes that (a) rank the causative factors that contribute to information latency and suggest actionable approaches for resolving these issues; (b) disclose the specific sources of information latency (at various levels, i.e. portfolio, security and data element); and (c) enable access to the underlying factors in a form amenable for ready inclusion in quantitative risk models and also traditional business process management.