How #AlternativeData Delivers Opportunities Amid Disruption
The time has come to start thinking about what the return will look like.
Disruption can be disorienting and distressing, particularly if life-threatening situations develop. Business owners seeking to deliver operational resilience – and save jobs – often revert to “crisis mode,” focusing on immediate concerns and permitting strategic issues to fall by the wayside. This is not a sustainable operating methodology for a multi-month (possibly multi-year) event like the current pandemic.
More importantly, this is a suboptimal operating methodology. Crisis mode delivers tunnel vision that makes it impossible to spot strategic opportunities amid disruption. It may not even deliver survival if the immediate priority is to return to “business as usual.”
Let’s be clear. Few businesses will return to “business as usual” after the pandemic. Sustained mobility restrictions change consumer behavior. Sustained reliance on a distributed workforce changes business priorities and operating realities. Supplier relationships change. Risk profiles shift since disruption is distributed unevenly throughout the economy. Most knowledge workers are inconvenienced, not unemployed. Conversely, medical staff, personal services and manufacturing workers are disproportionately impacted during the pandemic.
Risk exposures shift as well. Businesses of all sizes are now far more exposed to shifts in government policy. The shifts go deeper into the economy beyond the trade war upticks which are unsettling markets today. Every shift (not matter how small) in fiscal and liquidity economic lifelines creates a material impact on a firm’s near-term operational resilience. When private credit risk converts to sovereign risk (via government guarantees) and regulators relax loss recognition rules and regulatory capital requirements, important shifts occur in how banks measure and manage their credit risk.
More permanent health and workplace safety restrictions (while necessary) as well as efforts to sanitize and digitize the supply chain through trade policy (as recommended here last month) will increase operational overhead and, ultimately, prices. Shifts in trade policies, digital taxation policy, data privacy requirements, and ultimately the withdrawal of emergency economic lifelines at the national level will generate spillover effects. Companies not accustomed to monitoring public policy risks regularly face the risk that policy shifts can impact their businesses in unanticipated ways. Not all those shifts are negative.
A company that spots a shift in trade policy quickly can respond nimbly, guaranteeing not only near-term survival but also revenue growth and customer loyalty that propels growth and innovation.
At BCMstrategy, Inc., our patented technology is helping companies preserve jobs and position strategically for growth by providing strategists and analysts with the ability to monitor, measure, and strategically manage their exposure to public policy risks. Our PolicyScope platform delivers both policy risk quantification and access to the underlying data. As we noted during our recent webinars for ADAM Global and Interactive Brokers last month, the ability to see visualizations of aggregate daily global policy activity delivers efficiencies and advanced insights.
Concrete examples for how real people are using the PolicyScope platform today include:
* Using BCMstrategy, Inc.’s PolicyScope platform, the practice leader for a major global firm spotted within 24 hours key documents and developments that were strategically significant for his clients’ strategic interests. He and his team were able to craft a strategic response quickly, while his competitors were not even aware of the developments. * Hedge Fund: “if you carry positions and trade longer term, i.e. more than 30 seconds, the PolicyScope platform is a must-have.”
* Algorithmic Trader: "Thx for flagging (a key development)...think it's starting to circulate in trader-chats as we speak and you beat the chats."
* Bank Board Advisor and Law Professor: Your reports based on the PolicyScope data are "on point, insightful, and more advanced than 90% of the financial commentary out there...They are clearly based on an enormous amount of careful research and thinking."
The PolicyScope technology also helps corporate leaders ensure that their distributed teams are less vulnerable to making decisions based on incomplete or inaccurate information.
Distributed workforces are a higher risk for acquiring information online from biased sources that may exaggerate or deliver inaccurate/incomplete information that feed fear and rumors.
By equipping decision-makers with direct access to concrete, unbiased, objective, and transparent information regarding policy activity, corporate leaders can make better decisions with confidence that they are acting on real information.
* Because it is automated, our system never experiences information overload.
* Because it is a machine, our system never experiences the kind of distracting emotional reaction that each of us has to the unfolding developments and mounting death toll from around the world.
* Because every aspect of the system is automated, including delivery, our customers do not need to worry about illness creating disruptions regarding data delivery.
By assembling a global 360-degree perspective of daily developments and displaying that information visually, our automated system helps strategist and analysts focus on hard facts and make better decisions during a period of extreme disruption. We are honored and glad to be helpful to our friends and colleagues during this difficult period.
Barbara C. Matthews is Founder and Chief Executive Officer of BCMstrategy, Inc., a company using patented technology to quantify public policy risks through the PolicyScope platform. A member of the Council on Foreign Relations, she is also a non-resident Senior Fellow at the Atlantic Council and a Fellow of the Salzburg Global Seminar. Prior to becoming a technology pioneer, she served as the first U.S. Treasury Attache to the European Union (with the Senate-confirmed diplomatic rank of Minister-Counselor) and as Senior Counsel to the House of Representatives Financial Services Committee. She has chaired meetings and delivered speeches on five continents and is a prolific writer.