Pershing digs into its big data plate to find securities to lend

Custodian's “Lending Ball” tech tool finds matches for securities lending

Jun 17, 2014 @ 12:01 am

By Joyce Hanson

It looks like big data will soon arrive on Pershing's NetX360 platform for advisers and their clients.

A new tech tool from Pershing called “Lending Ball” — a play on words based on Michael Lewis' 2003 bestseller, Moneyball, about the Oakland Athletics baseball team's data-driven approach to hiring undervalued players — drills deeply into a client portfolio to locate hard-to-find securities that another client, such as a hedge fund, might want to borrow to use for a short position.

“This is a big data story. In the past, Pershing has made big data available to advisers, but it wasn't really usable,” said Joel Bruckenstein, co-founder of the T3 Technology Tools for Today conference. “In order for big data to be useful, it needs to be organized. Lending Ball shows how big data can be used when it's presented in a compelling fashion.”

Patrick Yip, Pershing's director of technology strategy and product management, said there has been a lot of talk lately in financial services about big data.

“Obviously, at Pershing we have a lot of data,” he said. “We're really focused on what we call decision science, which is taking the big data we have and applying advanced analytics on the data to come up with actionable business insights.”

Pershing uses Tableau Software's data visualization technology to find securities hard to borrow that offer an attractive return or borrowing rate, Mr. Yip said. The technology maps out the data using a variety of colored charts and graphs.

“We can search through all the accounts at Pershing and match them up. The adviser angle is that it's a way for them to actually help their clients generate more revenue based on an existing position they're holding,” he said. “Before they may have just been able to pick one or two fully paid lending securities and go through a lot of gyrating to find the right positions. But now we have the visualization that shows the opportunities.”

He added that Lending Ball has not yet been rolled out to individual advisers. Pershing is first working with broker-dealers, Mr. Yip said, and the plan is to roll it out to registered investment advisers and advisers affiliated with broker-dealers some time in 2015.

Ari Kaplan, president of baseball analytics firm AriBall, spoke at Pershing's INSITE 2014 conference earlier this month on “Applying the Power of Big Data and Decision Science to Your Business.” Mr. Kaplan, whose firm helps Major League Baseball teams evaluate performance and salaries using quantitative analytics, watched a demo of Lending Ball at the conference. He was impressed by the tool's interface, which allows users to determine what past investment behaviors might be optimized in the future.

“As a sports analyst, I identify information to make more wins in a game to optimize player payroll. In the Pershing sense, you're optimizing return on investment to allocate investments for getting the most money back,” Mr. Kaplan said.

Big data has recently emerged as a futuristic tech theme among financial services firms as they study how digital companies such as Inc. have collected data to learn about customer preferences. While custodians have been gathering account information for years, technological advances are allowing custodians to pinpoint big data's uses for advisers.

In addition to the Lending Ball tool, Pershing is now applying big data to asset flows, which will allow advisers to spot trends and see problem areas where large sums are being moved in and out of customer accounts. Further, Pershing is compiling data on digital clicks on NetXInvestor to give advisers insights into client behavior.


What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

May 02


Women Adviser Summit

The InvestmentNews Women Adviser Summit, a one-day workshop now held in four cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her personal and professional self to the next level.... Learn more

Featured video


The #MeToo movement and the financial advice industry

Attendees at the Women to Watch luncheon commend the #MeToo movement for raising awareness about the issue of sexual harassment and bringing women together.

Latest news & opinion

SEC forging ahead on fiduciary rule despite DOL rule decision in 5th Circuit

Chairman Jay Clayton says 'the sooner the better' when asked when an SEC fiduciary rule will be ready.

What the next market downturn means for small RIAs

Firms that have enjoyed AUM growth because of the runup in stocks may find it hard to adjust to declining revenues if the market suffers a major correction.

DOL fiduciary rule likely to live on despite appeals court loss

Future developments will hinge on whether the Labor Department continues the fight to remake the regulation its own way.

DOL fiduciary rule: Industry reacts to Fifth Circuit ruling

Groups on both sides of the fiduciary debate had plenty to say.

Fifth Circuit Court of Appeals vacates DOL fiduciary rule

In split decision, judges say agency exceeded authority.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print