Project First aims at tracking financial services-related sentiment

Project First is a European Union-backed research effort to find a way of extracting and analysing financial services-related sentiment from social media networks. It has recently launched its first running prototype.

Launched in late 2010, the three year project aims to harness artificial intelligence to find information on the Internet that can then be used to support financial decision makers.

The research project is being involves a consortium including Banca Monte dei Paschi di Siena, Boerse Stuttgart, Interactive Data b-next and the University of Hohenheim. They have a €4.6 million budget co-funded by the EU.

Unveiling their first working prototype at a conference in Milan, the consortium revealed that, applied to Twitter or textual data extracted from blogs, it is currently capable of extracting sentiment and relating it to stock price movements.

"Results indicate a strong positive relationship between sentiment and trading volume," say the group.

Additionally, by monitoring social chatter among market participants, the technology is said to be able to detect cases of financial market abuse, like attempts to manipulate prices through false information releases, a feature which could help improve supervisory and regulatory oversight.

A fully functional version of the system is expected to be released by the end of the project in September 2013.