Predictive Analytics: No-Deal BREXIT

For the last year or so, we have been in “stealth mode,” building out our policy risk measurement technology and predictive analytics. Translating unstructured data (words) from the policy process into structured data (numbers) that can support predictive analytics and quantification has been quite a journey.

Every day, the system captures, tags, measures and saves the technical activity that never makes major headlines alongside the news stories themselves. We get a 360-degree views of the policy reaction function daily and globally. Every day, we see policymakers create “break the glass” rules and frameworks that will be triggered immediately upon a No-Deal Brexit. It’s quite a sight.

We are automatically capturing, analyzing, and dematerializing the policy reaction function daily, at processing speeds far faster than humans can read. The resulting data visualizations accelerate information intake, decrease information overload, and permit users to identify quickly the key developments that will be strategically significant for their businesses. They deliver enhanced cognition — and significant operational efficiencies for users — by automating many components of the analytical process….even though we are still in beta.

The platform is currently available only to a small number of carefully selected Early Adopter customers as we beta test the platform and identify priority areas for refinements. A full product launch still lies in our future.

But Brexit is forcing our hand. In early February, the patented process indicated that Brexit had reached a tipping point. The developments are technical as well as numerous, so they often escape being captured by the media. We shared that analysis in a February 10 blogpost. Today’s story analyzes how the predictive analytics fared.

The State of Play on February 10, 2019

Policymakers in the UK, the European Union, Australia, and EFTA (European Free Trade Area) accelerated dramatically their preparations for a no-deal Brexit. Our patented process produced the following structure data measuring and analyzing automatically the policy momentum:

The data showed the volume of official sector action out-pacing official sector rhetoric. When action (the green line) exceeds rhetoric (the blue line), it signals that policymaking is moving into high gear. It signals that policymakers are not just posturing or bluffing their way through a negotiation. They are battening down their hatches to prepare for a No-Deal Brexit. They are putting into place rules and protocols that take effect automatically upon the event of a No-Deal Brexit. They are taking concrete action, not just talking.

The technical details matter more to businesses struggling to position themselves for Brexit Day far more than fiery rhetoric around the edges of meetings and parliamentary debates. In fact, the distribution of activity was broad and deep. It showed policymakers on both sides of the English Channel taking concrete measures to minimize disruption associated with an end-March No-Deal Brexit scenario. Those sectors included:

  • transportation,
  • the EU budget and economic surveillance process,
  • maritime corridors,
  • electronic freight documentation standards (while staying intriguingly silent on blockchain deployment opportunities),
  • security cooperation/Interpol,
  • supervision standards for EU financial firms with branches in “non-EU countries”,
  • CCP equivalence determinations,
  • calculation of reference data in securities markets,
  • customs procedures,
  • cross-border cash regulations,
  • data protection/data privacy/GDPR, and
  • citizen rights.

They also include two efforts to strengthen strategic economic, financial and trade ties at opposite ends of the Brexit debate: (i) through increased maritime ties between Ireland, Netherlands, and France financed by the European Commission and (ii) through deeper financial regulatory cooperation between Australia and the UK.

So on February 10 we published the following conclusion: Everything is pointing towards a No-Deal Brexit right now. Buckle up.

How Did We Do? Validation Assessment

As anticipated, the end of March came and went with no deal between the UK and the EU regarding Brexit. From February 10 to the end of March, no policymaker took concrete action to shift the trajectory of policy. Not only did policymakers continue to prepare for a No-Deal Brexit, they took actions and articulated rhetoric that hardened their positions.

Moreover, inconsistent policy demands emerged. The platform’s language quantification framework provided a ring side seat to evaluate concrete policy language while stripping away all the emotional rhetoric which distracts from analysis. Specifically:

— The EU requires that the House of Commons pass the Withdrawal Agreement without changing any of the terms.

— The Labour Party will only support the Withdrawal Agreement with changes.

— Various indicative votes in the House of Commons explore changes to the Withdrawal Agreement without pointing out that the EU will not accept any changes.

— The only unity in the House of Commons exists on the position that some deal other than the Withdrawal Agreement needs to occur in order to implement Brexit.

— Options to hold a new election or a new referendum never attract a critical mass of votes.

— EU policymakers spent the last week highlighting how they are prepared not only for Brexit but also for a future in which European leaders are free to exercise “financial sovereignty” without the UK.

Our system thus continues to point towards a hard exit from the EU.

Portions of the text above were originally published at www.bcmstrategy2.com on February 10, 2019.

Quantifying cross-border policy risk using patented tech Founder & CEO www.policyscope.io #Data #NLP #geopolitics #DigitalCurrency #PredictiveAnalytics

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