New rules governing analyst research are forcing banks and brokers in Europe to rethink their content strategy and the way such reports are accessed by clients.
The long-established practice of analysts’ research being financed by the commission that clients pay each time they buy or sell shares is being swept away by MiFID II and its drive for transparency.
Under the European trading directive, which is due to come into force in 2018, investment managers will have to pay specifically for any analyst research or other services they receive.
As they begin to reassess which research is worth buying, those on the sell-side are reviewing their content and distribution strategies and asking whether they can justify the expense at a time when there are stringent requirements for capital elsewhere in the bank.
For those who decide to continue in the research business, it is important that they not only seek to enhance the quality of their product but also consider the ways they interact with clients.
For example, front-line sales people need to be able to find research that has sometimes not been tagged prescriptively enough for their internal search engine to locate.
Similarly, once they solve the internal search challenge the same applies for front-end client portals when users come to look for their chosen research document.
This highlights an obvious need for firms to make their own research and further textual information more searchable and retrievable by clients in their portals.
By using Thomson Reuters Intelligent Tagging they can capture information on the portal and make it searchable, as well as integrate further high-value proprietary and third-party content.
Here’s a step-by-step guide to how it works:
- Unstructured text items are submitted to Intelligent Tagging and analyzed to understand meaning and recognize topics of interest such as price movements, deals, and rating downgrades and how these relate to companies, people, instruments and other entities.
- Connections are made between identified entities and relevant PermIDs, the machine-readable identifier developed to create a unique reference for any data item.
- A relevance score is calculated to indicate how important a content item is to an entity.
- A reference to the content item is added to the Intelligent Tagging database along with the relevant metadata tags including PermIDs.
- The metadata generated by Intelligent Tagging, including PermID, is stored in the client’s research database and is incorporated into the search engine of the client’s research platform. A reference to the content item is added to the Intelligent Tagging database along with the relevant metadata tags including PermIDs.
Thomson Reuters Intelligent Tagging can make hundreds of thousands of research reports, research notes, estimates updates, market open and trade idea emails and other textual content easy to find on the research portal so buy-side clients and the bank’s sales people can access and use more content.
And with the necessary tracking on the portal, the number of individual content views and time spent reading items online can be tracked and used to demonstrate value.