Data science, artificial intelligence, and machine learning are having a significant impact on the finance industry. We interviewed Jake Hershey, Exempt Edge’s Data Scientist, and asked him to explain what data science really is, why we should care, and the impact it will have on the future of personal finance.
What is a Data Scientist?
Data science is a new discipline made possible by the extraordinary advances in computing power over the last 20 years. A data scientist builds algorithms and solutions that extract information from data.
What methods or tools do you use when analyzing a data set?
I use graphical systems, to visually explore the relations in a dataset, and then apply different kinds of statistical models (clustering, logistical regression, “neural network” models) to identify patterns in the data. For example, I’ve created a website that explores what happens to stock prices after they exhibit the “head and shoulders” technical pattern.
Why should we care about machine learning?
Machine learning allows us to build and train statistical models that reveal useful things about the natural and social world around us. A single person can feel lost in our expanding sea of information, but after building the appropriate statistical models of the data, that person can identify patterns, develop accurate statistically-based predictions, and gain real insights into the underlying mechanisms that are driving the changes around us.
What impact will machine learning have on personal finance?
Artificial Intelligence systems are already responsible for the majority of short-term trades on the NYSE. Companies are using machine learning to digest huge amounts of social and financial data, to guide investment strategies. However, because high-frequency trading companies do not hold positions over night, they are thought to have minimal impact on long-term buy-and-hold investors. Because individual people are limited to their own intelligence, while artificial intelligence systems do not have an upward ceiling on their abilities, it is almost certain that AI systems will ultimately dominate financial markets.
How will your role at Exempt Edge improve our clients’ overall experience?
I’m building a web-based platform that will increase the efficiency of onboarding our clients’ data. This will speed up the onboarding process, so client’s will spend less time working on onboarding, and more time enjoying the benefits of their ExemptEdge relationship.
Jake obtained his Bachelors and Ph.D. from the University of California in Psychology, with a focus on statistical analysis and experimental design. After graduation, he led the data analytics team at EarthLink for seven years, before moving to Oregon and working remotely as the Director of Business Intelligence for several publishing firms in New York. Most recently, he’s worked at TheStreet.com, Refinery29, and of course, Exempt Edge.