Digging up data: the leap from fossils to finance
Palaeo scientist to mine vast market ‘info stores’
A FORMER palaeoanthropologist fascinated by statistics is setting her sights on South Africa’s financial markets.
Merrill van der Walt, who was recently appointed “big data” analyst for central securities depository Strate, has to apply statistical analytics to the vast stores of information collected over 17 years on transactions in South African equity, bond and money markets.
The data is stored in three large data warehouses.
Van der Walt was part of the team that uncovered the extinct hominin species Homo naledi in the Cradle of Humankind.
She said she had long been fascinated by evolution, but admitted she was glad to have left the field, in part because it meant she no longer had to “deal with creationists”.
Strate, which was responsible for “dematerialising” — or removing paper share certificates — from the financial markets, handles post-settlement for trades, guaranteeing transactions and the sale of shares. It processes about 300 000 transactions a day, creating a huge volume of data that Van der Walt has been asked to turn into meaningful insights.
The idea, she said, was to turn the data into a new revenue stream for the company, which is 45% owned by the JSE, with the rest of the shares in the hands of South Africa’s banks.
Van der Walt, who quipped that she’s moved “from fossils to finance” — she has a PhD in palaeoanthropology and a master’s degree in genetics — said there was a trend to hire people from diverse backgrounds. She certainly doesn’t fit the traditional finance mould.
She said her lack of experience in the markets should play to her advantage in that she had no preconceived ideas about what trends and relationships in the data she must analyse should look like.
But it is the type of statistical work she has applied as a palaeoanthropologist. For example, she did extensive work mapping the fossils of animal species around a massive inland sea that existed in what is now South Africa between the Permian and Triassic periods some 250 million years ago. The sea shrank as the planet warmed, leaving a rich fossil record.
“I plotted 40 000 animals along the shoreline as it shrank; saw the rise of mammals at the time. I plotted it all onto a geographical information system with lots of overlays and was able to pick up trends on these animals.”
The language of maths remained the same, no matter if it was applied in palaeoanthropology or financial markets, she said.
Strate intended analysing both structured and unstructured data sources to “pick up relationships, correlations and neighbouring analogies that you wouldn’t have been able to compute yourself”, said Van der Walt.
“You can then forecast and predict, and assist the markets.”
Central securities depositories in several developed markets have begun mining their vast data stores and selling anonymised information. But Strate is one of the first in a developing economy to do it.
Before it gets there, though, Strate must consolidate all its data sources and create simplified query processes to allow for ad hoc and tailor-made reporting.
“You want to be able to include every source of data to allow for truly advanced analytics,” said Van der Walt. The company will soon announce the name of a technology partner that will assist it.
Privacy would be central to the project, she said, adding that Strate was conscious of the stringent rules set down by the Protection of Personal Informa-
It processes about 300 000 transactions a day, creating a huge volume of data
tion Act.
Access to the system will be secure and controlled. “We will not divulge a granular level of detail. And CSDs must not forget what their core business is, and that’s to bring about regulation and trust; that this is a trusted entity that will guarantee a settlement.” duncan@techcentral.co.za Comment on this: write to letters@businesstimes.co.za or SMS us at 33971 www.sundaytimes.co.za