November 9, 2010 – Risk of financial market shocks and crashes from the use of unstructured data online has prompted the European Union to invest heavily into research and infrastructure to enable financial decision-makers to find relevant, real-time data.
The research project, called FIRST, is slated to take three years and has a price tag of 4.57 million euros (about 6.3 million USD).
Responding to the “extreme challenge” of vast and growing amounts of varied data in financial markets, the research aims to find the best ways to extract relevant information in real-time, according to the project website. Existing market tools fail to deliver urgent identification of large-scale risks to financial markets, project leaders stated on their site.
Main information sources involve news outlets and releases, blogs, and message boards.
Tomás Pariente Lobo, FIRST project coordinator, says the rumors and secrecy around Apple’s release of the iPhone in 2007 are a solid example of how information and methods from FIRST could aid investors. Extracting and analyzing data from numerous sources could fortify correct data on pending and breaking business releases and news to avoid sudden, large market shifts or confusion, Lobo says.
“Taking into account a new source of financial information theoretically means establishing competitive advantage. We are basically trying to provide ‘yet another view’ on the situation in the market,” he says.
At its completion, FIRST is expected to lead to the development of a data review infrastructure prototype evaluated in the areas of reputation risk, market surveillance, and online retail banking and brokerage, according to the project website. The extraction and integration system would support end users not skilled in IT to access on-demand financial data and analysis. The FIRST system will also be released as open source software.
An E.U. consortium on the project includes Germany, Italy, Slovenia, Spain and Germany’s second largest stock exchange, Boerse Stuttgart.
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