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UBS’s Big Data Lab Is No Longer Just for its Analysts
The world’s top equity research firm recently spun out its signature Evidence Lab to offer alternative data insights directly to clients.
A few weeks before Thanksgiving, UBS Group's Evidence Lab – the data science division powering the Swiss bank’s investment research – split into its own business inside the firm.
Instead of being housed within the research business, where it was originated, UBS Evidence Lab now operates as a separate group – one that continues to serve UBS analysts while simultaneously opening its data-powered research up to other clients. The move signals UBS’s desire to look beyond the traditional structure of sell-side research and seek out other commercial opportunities for the data analytics group.
“We decided this was the best way to serve our clients and gain flexibility to engage in different ways with clients,” said Juan Luis Perez, the head of research, the Evidence Lab, and data analytics at UBS.
The new structure means the data produced by Evidence Lab can be packaged and sold as its own product outside of investment research, one that can be made directly available to subscribing clients.
“The idea is we have a lot of content that doesn’t go through the channels of conventional research,” Perez explained. “It’s a much more evolved model than what I think you’re going to find in most other sell-side firms.”
Since Evidence Lab’s creation in 2014, the division has operated using a question-and-answer model, with analysts asking investing-related questions and UBS Evidence Lab’s roster of data scientists and subject-matter experts providing the answers. It’s a model that has brought UBS analysts wide acclaim and resulted in the firm’s rise to first place in Institutional Investor’s ranking of the top equity research firms globally – a title UBS claimed this year for the second year in a row.
But as Evidence Lab continued to expand – the number of reports produced by the group growing from 74 in its first year to 3000 this year – more data on companies and sectors was being left on the cutting room floor.
“From what we deliver, analysts may end up choosing four or five charts and maybe a table of data that helps support their thesis,” explained Barry Hurewitz, global head of Evidence Lab innovations. “But we could be giving them 200 charts.”
Now, this “insight-ready” data will be available to any clients who wish to subscribe to it, Hurewitz said.
“The biggest opportunities occur when you think about ways you can add value within the firm or to other markets that have not historically been the target of sell-side research organizations,” he added. “There are lots of potential opportunities to be explored here.”