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  • by Dani Fava
  • Director of Product Strategy, TD Ameritrade Institutional

Unlocking Real Uses for Data in Financial Services

In case you haven’t heard, everyone is talking about data. Big data, data science, data analytics—you can’t escape it. Some of the biggest and most successful companies in the world are rich with it: Google, Facebook, Apple, and Amazon. But what does it really mean? How can this data really be used? And, most importantly, does the data “concept” have a place in financial services?

The obvious answer to the last question is, yes: Data does have a place in financial services. (If it didn’t, I wouldn’t be writing this TD Ameritrade blog.) The less obvious answer to the question is, how? First, let’s explore an assumption: Data affects human behavior. Additionally, the more effectively data is presented, the more it will affect human behavior. I’ll use an example to illustrate this concept.

Last week, I found myself uncharacteristically driving down the street at 30 mph, watching cars pass as I listened to my 18-year-old daughter complain about being late. And I wondered, what made my behavior change so drastically? And then it hit me.

Like most people, I browse my American Express statement every month. I check the balance, browse through the transactions to make sure nothing seems egregiously incorrect, and pay my bill (or at least some portion of it). But recently, American Express added a pie chart that breaks down my spending for the month. Usually, the entertainment category is the biggest piece of the pie, which I find satisfying—my life is filled with experiences! But last month a new pie slice reared its ugly head: Transit. Upon expanding this category, I learned that I had spent MORE on speed cameras and parking tickets in one month than I had spent on entertainment. How embarrassing!

Thinking about this, I realized that this data always existed. I could—and have—been looking at this data every month, but what had changed was the way it was presented to me. Now I see it in a way that makes me truly understand my spending, and in a way that made me change my behavior.

This is just the beginning of using data in financial services. As a matter of fact, there is a world of untapped data right here at TD Ameritrade. How can you see this data in a way that helps you understand your behavior as well as your client’s behavior—and perhaps change it for the better?

Like Google, can TD Ameritrade tell what advisors are looking for? Akin to Facebook, can we tell what advisors like? Amazon, what advisors buy? And Apple, where advisors go and what they value? Then, can we present the data in such a way that makes you truly understand your own behavior and that of your peers? We believe we can give you that “AHA” moment around your investment decisions or hiring practices! Our TD Ameritrade tech team is working on building advisor analytics to help answer all of these questions for you while helping you recognize behaviors and promote positive change.

In fact, we’re finding that data is arguably one of the most important assets of financial services. Data makes people move. And, an inch of movement will bring us closer to our goals than a mile of intention. So, are you ready to embrace data?

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