Structured Content in the Financial Services Industry: Driving competitive differentiation and profits in investment research

by Bill Trippe, Vice President and Lead Analyst, Content Strategies, The Gilbane Group

The financial challenges of the past 18 months have brought a new focus on the role of technology in the financial services industry. Emerging standards such as XBRL (eXtensible Business Reporting Language) and RIXML (Research Information eXtensible Markup Language) are garnering headlines for their potential impact on transparency and interoperability. At the same time, many financial services companies are discovering that increased requirements for regulation in the industry are actually opening doors to increased profits. Why? Because the same technology that helps financial services companies meet industry regulations and mitigate risk can also help them reduce costs, deliver more personalized information to their clients — faster — and gain a competitive advantage.

Consider the area of investment research, where an investment bank or other institution has securities analysts who are tasked with understanding a company, a group of companies, or a sector and rendering buy and sell decisions on stocks and fixed income securities. These analysts can use RIXML (an XML schema developed by a consortium of buy- and sell-side financial services companies to improve the process for sell-side companies to create and publish financial information) and XBRL (a standard and structured way for the financial industry to identify key industry information around business reporting, such as a company’s net profit) as tools to deliver relevant, easy-to-understand research information to decision makers.  These two industry standards demonstrate how XML is already being used as a way to leverage structured, intelligent content to meet critical transparency requirements for transactions and reporting — including, for example, the proper inclusion of all necessary disclosures and error-free information.

XML: From Compliance to Better, Faster Investment Research Reporting
What, then, would happen if securities analysts automated the creation, validation, and dissemination of their investment research using XML? After all, at a high level, investment research shares many characteristics with other applications that have benefitted from XML-based dynamic publishing solutions:

  • The content is high-value, created by experts for other experts.
  • The reports include a mix of narrative, tabular, and graphical content that ultimately must be presented in an attractive, concise format.
  • The content is consumed in a variety of channels — print, online, and mobile.
  • The content has multiple intended audiences, many of whom are expecting content tailored for their needs.
  • The content has to be timely, often created in very tight time windows (such as between the close of business one day and the start of business the following day).

By creating, validating, and disseminating investment research information using a structured XML approach, analysts can publish the most relevant information, better highlight the benefits of an investment opportunity for a specific client, and create more reports — faster — for more clients, through the reuse of content delivered to multiple audiences across different materials and channels, all of which potentially leads to more trades and increased profits.

Limitations of Existing Tools
Investment research has traditionally been a well-funded arena, where institutions are more than ready to apply technology to a problem. Yet introducing the underlying technology to a community of very bright and dedicated people working with desktop tools — notably Microsoft Word and Excel, which up until now have not been ideal for creating and managing structured XML content — is another story.

Analysts typically create and manage complex financial models in Excel and author the narrative and analytical text in Word. These programs don’t easily support an automated process for single-source, multi-channel publishing, which poses challenges to bringing XML technology to investment research. Consequently, many financial services organizations have invested heavily in customizing early versions of Microsoft Word and Excel and found themselves with — literally — scores or even hundreds of macros, scripts, and custom programs. While many of these custom solutions have been effective in helping analysts get their day-to-day work done, this model of content development is not scalable and is extremely hard to support. As a result, and despite the fact that investment research is high-profile and often well-budgeted, infusing an automated XML approach into the publishing of investor research information has proven elusive.

Technology that Adapts to the Tools the Experts Like
One given in this environment is that research analysts expect to be able to use Microsoft Office — and Word in particular — even if they are pulling data from other systems and doing analytical and modeling work in Excel and other tools. According to Richard Brandt,  Manager, Financial Services Solutions at Quark, “In working with research analysts, we have found they are adept at creating customized reports in Word, but leaving a Word environment would jeopardize their productivity.”

With Microsoft Word as a given, the path to success, then, is to make the creation of XML transparent to analysts — turning Word into a tool for the creation of intelligent XML content, and then automating the delivery of XML content through a dynamic publishing solution. Such a solution can:

  • Provide multi-channel output to a long — and growing — list of formats and devices.
  • Enable “profiling” of the content for custom publishing to different audiences and users.

Both areas of functionality are key. In the case of financial services, multi-channel publishing increasingly means not just publishing to many formats and devices, but also publishing in context — a report or summary that might appear in a Web site or in the context of a financial research application. Profiling is even more subtle and intriguing — one audience might receive the full report, another just a summary, and a third the summary and selected sections and tables. The greater the flexibility to reuse validated content across different publications, the more successful the investment research function will be, especially if that publishing is automatic and doesn’t burden the institution with manual, time-consuming, and error-prone formatting and reformatting of the content.

Quark XML Author for Microsoft Word
Gilbane sees Quark XML Author for Microsoft Word as the right match for the authoring needs of investment research and other kinds of structured financial analysis and writing. The document types produced through investment research are well-established and lend themselves to an intelligent content strategy, and the Quark XML Author add-on to Word allows authors to continue working in their preferred tools while creating XML content that is automatically captured, validated, and dynamically published for them.

XML will continue to play a big role in compliance to provide transparency.  The interesting question is how quickly financial firms can facilitate broad adoption of XML to drive true competitive differentiation. Dynamic publishing solutions — such as those Quark offers with useful structured authoring tools, integration with enterprise content management system, and XML publishing expertise — can give financial firms a significant means to build content applications that will improve efficiencies, create new products, and help deal with important regulatory requirements.

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