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Refresher courses about money laundering aren’t enough. Wall Streeters needs a “deep dive” into data and crowdsourcing tools.
Wall Street needs to reeducate itself about the meaning of continuing education. The way it’s handled now is misdirected and ineffectual. When most brokerage employees hear the phrase "continuing ed," they wince, because they associate the term with mandatory computerized training courses required by regulators. That's unfortunate, because there's never been a more critical time for financial professionals to continue their education.
FINRA (Financial Industry Regulatory Authority) member firm employees are required to sit through continuing ed sessions at three-year intervals. (They sit, but they can hardly stand it). It's hard to argue against the merit of reviewing compliance, regulatory, and ethical rules. Yet employees roll their eyes at the thought of attending these sessions, which rely on operational scenarios having little to do with the day-to-day work of many securities professionals.
Despite these requirements, analysts remain under-educated about important financial topics. They work in an age of dramatic transformations in financial technology. Yet they're likely to spend their careers in a state of complacent oblivion about cutting-edge developments. The specialized nature of most finance jobs is such that staffers can perform their roles without being exposed to changes occurring at the periphery of their functional expertise.
I've included below a summary of three rapidly-evolvoing aspects of securities trading and investments. The specifics of these topics would be a revelation to many Wall Street professionals:
Crowdsourcing: When many analysts and traders first hear about StockTwits , Harvest , MarketProphit , and Sumzero , they wrinkle their brows. Their only association with online stock discussion communities is the checkered world of Yahoo! Finance message boards, best known for rumors and conspiracy theories. Few analysts and traders are aware that high-caliber discussions, forecasts, and research can now be found on crowdsourcing websites.
Cashtagging: I'm often surprised by the readiness of experienced analysts and traders to dismiss the relevance of Twitter – even though that platform has become an important medium for sharing business news and opinions. Few are familiar with the existence of the cashtag (the pairing of dollar signs with ticker symbols in order to denote stock-specific messages). Conducting cashtag searches on Twitter can reveal important stock-related conversations.
Sentiment-Screening: Many Wall Street staffers are familiar with big data. However, few of them understand how their hedge fund clients use data services to mine Twitter and other social media venues for news and sentiment. The traders and analysts who work in New York's financial district might not even be aware that influential data science firms, like Dataminr, are headquartered in Silicon Alley, just miles from their offices.
During my tenure on Wall Street, I helped manage several training programs, geared towards junior research professionals. My "mock" research calls and writing workshops focused on important skills. However, senior finance professionals were generally not the target of our training. Even if they had been required to participate in training classes, important topics like datamining and crowdsourcing would not likely have been part of the curriculum.