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Big Data and Rapid Analytics in Capital Market Decision Making

Big Data and Rapid Analytics in Capital Market Decision Making

Buy, sell, hold. Three concepts that seem simple and straightforward enough. In fact, the decision is anything but simple, as anyone in the high stakes world of capital and secondary markets is well aware. An incredible amount of information gathering and assessing goes into making an investment decision. Dealing with pools or portfolios of real estate or mortgage-related assets requires even more information.

However, many in-house analysts and data scientists tasked with informing these decisions are using tools – spreadsheets, data dumps, models fueled by lagged information – that are unequipped to perform at the level today’s big data-driven markets demand.

The stakes are high, and missing critical elements can be costly. Today, advances in cloud-based computational power mean that you can – and should – make decisions with the largest and best universe of data available.

Of course, that requires the tools to operate in this new reality.

Information is the Foundation

If one piece of information related to a trade is wrong, it can mean the difference between a profit and a good profit; or worse, between profit and loss. That means you must start with best-in-class data sources, and Black Knight is by far the superior source for the information required by capital markets investors.

From nationwide MLS listings to our industry-leading McDash loan-level mortgage performance data, to public property records covering 99.9% of the U.S. population, Black Knight’s datasets are indispensable for those working with housing assets. Our Home Price Index (HPI) covers more than 20,000 ZIP codes nationwide, with unmatched granularity. Likewise, the analytics and models we produce can be indispensable in making informed portfolio and trading decisions.

When you’re dealing with massive data sets (McDash alone provides over a hundred data fields on more than 170 million current and historical mortgages), the sheer volume of information can be both invaluable and incapacitating without the right tools.

At Black Knight, our data scientists faced this reality on a daily basis. We needed a tool to wrangle the terabytes of data we deal with every day. Despite scouring the marketplace, we could not find an existing tool that fit the bill.

So we built it.

A Unique Virtual Analytics Lab

The result is our Rapid Analytics Platform (RAP), a virtual lab for those working with big data and complex analytics around housing-related assets. For those tasked with making or informing buy, sell and hold decisions around these assets, RAP is nothing less than a game-changer.

RAP gives data scientists and analysts access to all of Black Knight’s extensive data sets, as well as our automated valuation models (AVMs), advanced analytics and behavioral models, all from within a unified, powerful workspace. This single, seamless environment also lets users upload and merge their own proprietary data and other external data sources and apply analytics to the combined set. Whether the use case is modeling or benchmarking, RAP provides the ability to run scenarios and make assessments based upon all of these varied data sources – in one spot – efficiently and less expensively.

In practice, those on the buy side with a limited time window to make a decision can use RAP to examine all available data and distill the necessary information to bid or pass. Conversely, sellers are able to create pools for market with information that could become transparent to potential investors and hopefully make for a more robust auction or sales process.

Agnostic Power and Flexibility

RAP is code agnostic, allowing a firm to use any models already being used, as is, within the RAP environment. SQL, Python, R – whatever codebase a team has been working with can be imported and used with all of the included data sets, maximizing any existing investment as well as the reach and scope of the models themselves.

Since both the data and the code execution are live and powered by cloud computing, data can be pulled, models run, results reviewed, parameter tweaks made and run again, in real time.

Independence is critical for secondary markets analysts to develop a unique approach – not only to gain a competitive edge against competitors, but to differentiate internally as well. RAP allows them to maintain that independence and develop unique strategies for each unit within the firm, as well as against their competitors.

Something for Everyone

RAP brings countless use cases and groups under one umbrella, enabling better performance across the enterprise: from research, to trading, to due diligence, to quality assurance and portfolio valuation.

All of the many decisions made on a day-to-day basis for those involved in the capital and secondary markets present opportunity and risk. RAP provides the tools and information to discern one from the other and make the best moves determined by the best data at the optimum moment, and puts them in the hands of those who know what to do with that insight.