Technology allows new markets and alleviates risk
With its investment in technology in April 2012, Canadian Western Trust (CWT) has opened up a new market: high net worth clients.
“We discovered a few years ago that if we wanted to get into that market, we were going to have to make an investment in technology,” says Matt Colpitts, vice-president and general manager of the investment custody firm.
“Our previous technology didn’t allow us to meet the needs of those customers,” he says. “An investment manager with 500 clients wants to be able to view across all of their accounts at the same time,” he explains. “We weren’t able to offer that—all our services were geared to individual or corporate clients with a small number of accounts.”
This new technology has also allowed clients to view their accounts in real time, which is an enhancement from CWT’s previous system.
And, CWT’s internal processes have benefited.
“With our previous technology,” explains Colpitts, “we were having to do a lot of things manually. Our system had limitations.” For example, the former system did not show accrued income, so if a dividend on a stock had been declared and not paid, the system wouldn’t pick it up and reflect it on a client account. CWT had to calculate that manually and post it to the client’s account. “You introduce a level of risk when you’re doing calculations manually and posting them to accounts,” says Colpitts.
With its “significant investment” in technology, says Colpitts, CWT is minimizing that risk, using a more efficient process and maintaining lower pricing for its customers.
“As you continue to grow in your business with your existing technology, eventually the ability to do all of these manual calculations is going to bog you down and service is going to suffer,” says Colpitts. “We made the conscious decision to invest early before there was an impact to our clients.”
Predicting the market
They say you can’t predict the rise and fall of the stock market, but recent research may prove it possible.
Researchers found that using changes in the frequency of search volume as the basis of a trading strategy investing in the Dow Jones Industrial Average could have led to substantial profit.
In their paper, “Quantifying Trading Behavior in Financial Markets,” the researchers demonstrate that trading based on the number of queries on Google using the keyword debt could have brought in returns of up to 326%. “
We found that changes in the volume of certain Google search terms could be used as early warning signs of subsequent stock market movement,” said Dr. Tobias Preis, associate professor of behavioural science at Warwick Business School in the U.K.
The researchers also found that changes in how often financially related pages were viewed on Wikipedia could have been linked to subsequent movements of the Dow.
This month in numbers
40% of organizations believe using mobile technology to promote employee health engagement is a top priority for future adoption or expansion, yet only 11% measure return on investment on mobile apps — Buck Consultants’ Emerging Technology in Health Engagement Survey
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