THE ROLE OF FINANCIAL ANALYTICS IN INVESTMENT DECISION MAKING

Abstract

Purpose: This study looks at the "Human-Technology Paradox," where large investments in Analytics and Big Data do not always lead to better investment outcomes. The research shifts focus from just the accuracy of algorithms to the important role of Human Analytical Skills in investment decision-making.
Design/Methodology/Approach: Based on a systematic review developed a conceptual model to explore how four independent variables—Financial Analytics Sophistication, Analytical Tools, Access to Diverse Data, and Data Quality—affect the quality of investment decisions, with Analytical Skills acting as a mediator. The study suggests a framework where technology is not a replacement but a tool that supports human intelligence.
Findings: High-quality investment decisions happen only when analytics resources are designed to improve human skills. The research identifies five main hypotheses: the positive link between analytics sophistication and human skills; the role of tools in enhancing skills; the effect of data diversity on complex processing; the importance of data quality for skill effectiveness; and the direct connection between human skills and decision-making quality.
Originality/Value: This paper addresses a notable gap in research by highlighting Human Analytical Skills as a vital link between advanced technology and strategic success. It offers a guide to move past merely adopting technology towards a model that promotes collaboration between humans and machines, ensuring that data-driven insights effectively lead to sustained profitability and strategic flexibility.