Quants clamour for data, causing soul-searching at large banks

New York

THE insatiable demand for unique market data is putting banks in a tricky situation.

Quantitative investors, starved for trading signals that can be spun into gold, are pressuring the finance firms they work with to grant them access to proprietary information. It's easy to see why. In a world where every kernel of publicly available intelligence is quickly processed and acted upon, investing advantages can evaporate quickly. In quant speak, the alpha gets arbitraged away.

So, to gain a competitive advantage, some systematic investors are experimenting with peculiar sources, like satellite image…