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Gleaning Financial Insights by Revealing the Hidden Jargon of Financial Communication

Muchnik Lev, HUJI, School of Business Administration
Mugerman Yevgeny, HUJI, School of Business Administration, Finance and Banking

 

Category

Software

Keywords

Fintech, NLP, textual analysis

Development stage

Knowhow, open-source, interested in industry partnership for further product development

 

Application

Several studies have found that there are various relationships between the readability of financial texts and subsequent corporate performance in different domains.  For example, there is a link between the readability of an annual report to company earnings and analyst distribution. Reports that are less readable have been linked to lower investment in companies.

Our Innovation

Our researchers have developed methods for measuring the linguistic complexity of financial texts by using advanced NLP techniques. They have empirically documented the increasingly complex language used by companies who file annual 10-K reports.  Their methodology supports studies of linguistic complexity within financial reporting at different levels of granularity – over time, per industry and at the individual report level. Application of the same analysis to financial and general text corpora permits reliable cross-domain comparison along several attributes of text complexity.                

Opportunity

The open-source tools were published to stimulate further research on the readability of financial texts. The group is interested in industry partnerships to further create projects for regulators and practitioners.

 

Contact for more information:

Anna Pellivert
VP, BUSINESS DEVELOPMENT
+972-2-6586697