Andrew G Haldane: Will big data keep its promise?

Speech by Mr Andrew G Haldane, Executive Director and Chief Economist of the Bank of England, at the Data Analytics for Finance and Macro Research Centre, King's Business School, London, 19 April 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
16 May 2018

I am delighted to be here to launch the Data Analytics for Finance and Macro (DAFM) Research Centre at King's College Business School. I would like to congratulate Professors George Kapetanios and Georgios Chortareas, as Co-Directors (as well as former colleagues), for getting the centre to the launch pad and primed for take-off.

To get my punchline in early, I believe the application of data analytic techniques to the many pressing questions in finance and macro holds great promise. That is the reason the Bank of England, around four years ago, set up its own data analytics division. And that is why I very much welcome the setting up of this new centre, as a means of realising that promise.

But will Big Data keep its promise? I want to try and illustrate some of that promise of Big Data, as well as the potential pitfalls, by drawing on examples from recent Bank of England research on the economic and financial system. I will conclude with some, more speculative, thoughts on future Big Data research.

The path less followed

The first thing to say is that Big Data and data analytic techniques are not new. Nonetheless, over recent years they have become one of the most rapidly rising growth areas in academic and commercial circles. Over that period, data has become the new oil; data analytic techniques have become the oil extraction and refining plants of their time; and data companies have become the new oil giants.