Chapter 1
Paving a Path Toward Visual Communications

Visual communications can alleviate problems related to your complex data deluge, extract key points from your data, and help you create a visual narrative. The sequence of events, influencing factors, and unknown truths are examples of individual data stories that can become clearer with visual communications. Visualizations tell stories with charts to address a variety of needs starting with your own needs to evaluate data, communicate to peers, convince the board, present to clients, or report regulatory compliance. This chapter evaluates the current data state and presents a paved path toward a future with hardware and software advancements that you can use to create your own visual narrative.

Over the years we (a design research team) have partnered to create improved data displays that solve information challenges for our clients. In 2010, for instance, we worked on a risk platform-a proprietary technology software solution-for one of the world's largest bank holding companies. The platform, focused on structured products, was geared to provide research analysts with standard risk scenarios for fixed income securities.

The most informative feedback we received about the platform came from an analyst named Dave (not his real name), whose job it was to sort through the data to identify the major themes and highlights and publish weekly market perspectives for the firm. As part of his work, Dave reviewed information on market data rates, detail holdings, historical prepays, current prepayment models, rates of return, and color commentary across a set of securities. In addition, he read 12 daily news feeds, including them in his reports as needed. His reports were used all across the organization to make key decisions about fixed-income securities. In other words, his work was company-critical information.

As such, Dave needed to be in a position to access and analyze enormous amounts of data and distill it into a few key points to tell a clear story. In our conversation with Dave, he said that to maintain his position as a thought leader, he needed to remain "in constant discovery mode.." The value he provided lay in his ability to separate the signals from the noise and offer relevant insights. To deliver on that, Dave needed to improve his data displays. With that in mind he revealed that his main complaint was needing even more data display space despite using four separate computer screens, and he often found himself scrolling across vast spreadsheets to access that data. Here is what Dave told us he needed:

• He wanted to review Bloomberg market data on Treasuries, Swaps, LIBOR, and other indexes to compare them against portfolios by placing the two data sets side by side on one screen.
• He wanted to analyze multiple securities at one time, and he wanted to see a portfolio summary view within the context of other related portfolios.
• He wanted this text- and numbers-based information in a more graphical form to help him better interpret the data.

Having worked as a research analyst for 15 years, Dave knew what he needed from his data displays, and it had everything to do with improving his digital experience. During our interview he even held up his smartphone, pointing to its tiny screen and then back to the four large monitors. According to Dave, despite their limited screen size, the apps were more efficient than the monitors.

Information Delivery Needs

Dave is far from alone in wanting and needing a paved path toward better visual communication. The proliferation of apps on phones and tablets has created a new generation of users with higher expectations for all their digital experiences. Mobile apps created for play are pushing people to expect more from the applications in their work environment. Today's market demands immediacy, simplicity, and aesthetic appeal from mobile and desktop applications.

Tens of thousands of people just like Dave are out there in the world. Research analysts and others in finance and many related fields study complex data sets. They deliver weekly reports that are largely qualitative but with quantitative supporting details. An ever-expanding universe of data, plus regulatory requirements and greater global reach all contribute to the world's data complexity.

Bloomberg's market data, for example, is a huge and complex data source. The popular Bloomberg terminals provide data-driven insight into 52,000 companies, with more than 1,000,000 individuals consuming the 5,000 news stories published every day. Each terminal employs more than 30,000 command functions to navigate through the information. Analysts like Dave spend a significant portion of their time in Bloomberg.

As shown in Figure 1-1, other data sources, among the thousands that exist, include news and economic commentary as well as transactional, fund, portfolio, custodian, and accounting data to be presented within the context of investor client data. And the list goes on and on. Data sources continue to increase in type and size.

The number of additional elements that compound the complexity of data is astounding: risk and compliance rules set by firms, corporate actions set by the market, and investor mandates set as client guidelines for engagement, to name just a few.

Figure 1-1: Various Data Sources

Industry Demands

Regulatory pressures in the industry are another necessary but complicating factor. They impact the type, format, frequency, and volume of reports issued. For example, firms must configure reports for their clients that meet regulatory requirements and disclosures set by the Dodd-Frank Act. Varying additional jurisdictional boundaries create added requirements to comply with regulations by state bureaus and local foreign regulators. Outside of the United States, MiFID II regulates how trillions of euros worth of stocks, bonds, derivatives, and commodities are traded, settled, and reported. Influences of globalization layer still more factors of complexity into available financial data.

Likewise, clients from various regions of the world, each with their own language, currency, and culture, have differing expectations of how data should be presented (see Figure 1-2). They may expect data to be grouped, subgrouped, filtered, tallied, and organized into grids, pivot tables, or charts.

Figure 1-2: Globalization and Rule Demands

Enabling Factors

On the one hand, these factors increase the amount and complexity of the data. On the other hand, advancements in technology enable us to handle these increasing amounts of data more readily and present them in numerous different ways (see Figure 1-3). Improved processing power combined with cheaper data storage, faster transfer, and mobility are what make more data readily available. The upside is that this increased availability enables us to dig deeper and learn more. Technological advancements for gathering, storing, and sharing larger data sets increase our capabilities with interactive data visualizations. However, we must be careful to create visual communications that are accurate and insightful.

Figure 1-3: Hardware Capabilities

The world's ability to store digital information has roughly doubled every 40 months since the 1980s (see the following note). Major improvements in graphics cards and high-resolution displays have enabled the software side of the industry to create more sophisticated visuals without overburdening the computer systems, such as Business Intelligence (BI) and data visualization software (see Figure 1-4) now considered standard tools. In addition, we have powerful programming languages, open source charting libraries, technical computing packages, online visualization tools, and visualization research labs.

This statistic comes from an article in Science written by Martin Hilbert and Priscila López, "The World's Technological Capacity to Store, Communicate, and Compute Information" (Science 332 (6025): 60-65.doi:10.1126/science.1200970. PMID 21310967).

Figure 1-4: Software Capabilities

We are at a point in which hardware and software can be used to present data, but we need to consider how best to represent it. Today, we can spend less time gathering and aggregating data and more time visually organizing data accurately. Although technology has enabled us to do more with our charting capabilities, demands in the marketplace push us to achieve higher standards. Because of technology, we can now move far beyond the traditional bar, line, and pie chart to create more sophisticated versions or introduce completely new visual concepts.

As the standard for a sophisticated and accurate digital experience increases, the bar for communicating financial data to more diverse audiences is set ever higher. Firms often ask us, "What can we do to improve our investment communications?" Soon thereafter, individuals at those firms often come back to us and ask, "How do I best present this data to my peers at a meeting I have next week? And by the way, the following week, I need to present this data to the review board and audit committee."

The presentation of data needs to encourage relevant conversations across audiences. Each audience group will require a slightly different set of questions and therefore needs a different perspective of the data (see Figure 1-5).

Figure 1-5: Solutions for Multiple Audiences

A relationship manager, for...