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Client Success Story: Benchmarking Market Data Services - Comparing market data spend with peers

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The Client ✍️

Quantitative comparison of market data services used by the client and peers sheds light on the presence of market data services within client's organization and may trigger follow up.

The client is an international Asset Manager. The market data organization suspects a relative market data overspend compared to peers, but has no indicators to substantiate this.

As a starting point the client wants to compare the market data cost with peers, both on enterprise level and also on certain business activities.

The Challenge 🤔

Insight is needed on enterprise level firstly and for certain departments secondary.

Key is to have:

👉 Data from peers with a comparable activity scheme
👉 Reliable, comparable data on the most detailed and aggregated level
👉 Organisational mapping with peers
👉 Consequent currency conversions

Analysis on peer level 📊

TRG Screen has developed indicators and associated metrics for calculating and measuring of critical market data.

These indicators have been proven in time and adjusted where necessary. 5 quantitative efficiency ratios on enterprise level are used and agreed upon with the client (see Figure 1).

Each peer is scored against the metrics.

analysis-on-peer-level

TRG Screen market data value index 👩‍💻

1. The index value for each company is plotted against Asset Under Management (AUM)
2. An index value below 40 assumes relative over-servicing of market data services
3. An index value of over 40 assumes adequate effectiveness of market data services in place

Result 💡

The 5 individual ratios are combined and weighted in an overall index: The TRG Screen Market Data Value Index.

Outcome of the exercise including 5 peers is shown in figures 2 and 3.

trg-screen-market-data-value-index

market-data-value-index

Conclusion & Follow up ✔️

✅ Client is relatively over serviced with market data services from a quantitative point of view
✅ Target is to move from now 25.79 to 35 in three years by optimising setup of market data services
✅ Proceed with departmental peer comparisons

Looking to Benchmark your Market Data Spend?  👇

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