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70,000 questions a year, satellite imagery, and dismantling electric cars: How UBS is trying to change the face of financial research


UBS employs experts in fields like hydrology, climate science and data analytics to gain an edge on its competition.
Last year, analysts and a team of engineers dismantled an electric car to work out how much it was actually worth.

The bank gathers between 60,000 and 70,000 questions per year from clients.

For analysts at UBS, everything starts with a question.

The bank gathers between 60,000 and 70,000 questions per year from clients. These range from the macro — such as “how will a trade war impact the global economy?” — all the way to minutely detailed questions about the price of components in computers and cars.

Questions are then put into a database which the bank’s staff can look to when trying to analyse the state of the thousands companies it covers. UBS has coverage on between 85% and 88% of stocks on the MSCI World Index.

“Some of those questions are actively being thought about by the investors, some of those are in anticipation of what the markets should be thinking about in the near term,” Barry Hurewitz, global chief operating officer of UBS Group Research told Business Insider.

One thing that links all the questions, Juan Luis Perez, UBS’ global head of research told Business Insider in a separate conversation, is that they “matter.”

Question gathering is part of UBS’ long term plan to differentiate its research capability from that of other banks by taking an approach that is heavily focused on data, and applies the principles of scientific research to the world of high finance.

“A big part” of UBS’ research, Hurewitz told BI, is that scientific approach.

“[We have] a research methodology that is somewhat aligned with the scientific method,” he said.

“We want the analysts to really start with ‘What are the uncertainties and questions that are on minds of our investors?'”

The question bank, however, is “just a starting point,” Hurewitz says.

Once there’s a question in mind, UBS looks to find an answer, often using its Evidence Lab — a specialist research facility that employs experts in particular fields to identify trends and provide evidence for the questions clients and analysts are asking.

“The goal is to gather evidence and to conduct analysis that will make you feel more confident that what you know is different from the market, and is more likely to be right.”

UBS wants to exploit data to find opportunities for investors that other financial institutions are not seeing.

Traditionally this was the job of the analyst alone, but the huge increases in the amount of available data means that they are now hard pressed to cope with it all.

“The amount of data that was available 15 years ago is dramatically different to today,” Hurewitz said.

“To think that an analyst with Excel, two associates, and a CFA is going to be able cope with all that data, that’s not realistic.”

Not only is the amount of data available to banks drastically different to just a few years ago, so to are the tools available to explore and exploit that …read more

Source:: Business Insider


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