Selling data to feed hedge fund computers is one of the hottest areas of finance right now

Kumesh Aroomoogan has come a long way from his days at Wall Street bank Citigroup, where his job was to stay on top of breaking news. He remembers getting yelled at by a trader because he stopped watching news feeds to go the bathroom and missed a market-moving headline. Now, he’s the co-founder and CEO of Accern, a company that automates his old job.

Tedious office roles are increasingly done by computers, freeing up workers to do things that are (hopefully) more useful. To some extent, even the trader who once yelled at Aroomoogan has been automated: One of the hottest areas of finance these days is quantitative investing, which uses artificial intelligence to sift through massive troves of data to identify signals that humans can’t see. Quant funds are Accern’s biggest customers.

Aroomoogan’s bathroom-break schedule is less fraught now, because instead of supplying a human trader with tips about breaking news, Accern’s technology sweeps up data from 300 million websites, 150 million Twitter feeds, as well as analyst presentations and FactSet reports for traders—either humans or algorithms—to analyze. It uses natural-language processing to find keywords like company names, and measures when a story is rising up the media food chain, such as from blogs to newswires, to indicate that it may be important enough to act on.

“Quant hedge funds are buying as much data as they can,” Aroomoogan says. Top banks like Goldman Sachs are hosting events for their clients to meet with data vendors because their customers want to know everything about the latest available data. Investment banks want their own quants to be on top of things, too.

The so-called “alternative data” market was worth about $200 million in the US last year and is expected to double in four years, according to research and consulting firm Tabb Group. In addition to public websites, hedge funds are collecting and crunching data generated by credit card transactions, satellite images of parking lots, and customers reviews.