On Thursday and Friday, October 27-28, 2016, the Office of Financial Research and the University of Michigan’s Center on Finance, Law and Policy hosted a joint conference, “Big Data in Finance” in Ann Arbor, Michigan, which brought together a wide range of scholars, regulators, policymakers, and practitioners to explore how big data can be used to enhance financial stability and address other challenges in financial markets. More than 250 people attended from around the United States and abroad. The event drew students, faculty, and staff from ten different University of Michigan schools ranging from public policy to dentistry.
How can financial data be made more accessible and more secure, as well as more useful to regulators, market participants, and the public? As new data sets are created, opportunities emerge. Vast quantities of financial data may help identify emerging risks, enable market participants and regulators to see and better understand financial networks and interconnections, enhance financial stability, bolster consumer protection, and increase access to the underserved. Financial data can also increase transparency in the financial system for market participants, regulators and the public.
However, these vast data sets can raise significant questions about protecting security and privacy; ensuring data quality; protecting against discrimination or privacy intrusions; managing and analyzing enormous data sets; synthesizing and presenting data in usable form; and sharing data among regulators, researchers, and the public. Moreover, any conflicts among regulators and financial firms over such data could create opportunities for regulatory arbitrage and gaps in understanding risk in the financial system.