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Escape the Matrix: Demand insights on market data spend

Market data management systems are evolving to provide consumers with the insights they need to optimize their spending and make the most of their ever-more complex subscriptions, while those without a purpose-designed system face major financial risks in keeping their costs under control.

That was the key theme of Richard Mundell, Chief Product Officer of market-leading enterprise subscription management company TRG Screen, in a presentation to this year’s DKF conference.

demand insights on market data spend

A “paradigm shift” is under way bringing unprecedented clarity into firms’ spending and usage of the data that power markets, even as the sources and use of this vital information grows.

“Insights is where we need to be; that’s where we need to evolve to,” Mundell said.

As the volume and complexity of market data has increased by the year, so has the amount firms spend on it. Global spend reached a record $35.6 billion in 2021, up 7.4 percent on the previous year, according to an annual report by Burton-Taylor International Consulting. And with top-tier banks spending upwards of $500 million a year, optimizing this expenditure can deliver significant savings.

Granular data

However, without the right tools, this is not easy. Sure, today’s spend management systems can produce masses of granular data about who in an organization is using what information and how, and produce important reports on tasks such as compliance.

But movie buff Mundell likened the bucket of data produced to the streams of numbers generated in the 1999 sci-fi film “The Matrix”.

“This jumble of numbers reminds me of market data management and the difficulty in getting insights into how much you are spending and spotting opportunities to optimize that spend among all this noise,” he said.

For most people (in the movie), the data is incomprehensible but a select few will be able to interpret it.

NB – you can watch Mundell’s presentation as he guides data managers out of the Matrix to valuable insights here:

HubSpot Video

Not even the Matrix

For the firms paying more than $19 billion on aggregate for market data and not using a spend management system, Mundell said they are not even in the Matrix. At best, they are just hearing static.

These firms might try to manage their subscriptions using procurement systems such as Ivalua, Coupa or SAP Ariba; they might use their accounts payable system or even Excel.

While these can manage spending and contracts in general, they were not designed for the complexity of market data management, Mundell said.

“Market data is a special and complex beast. Service from one vendor can be delivered over another vendor’s platform or feed and you could be billed by a third and even under contract by a fourth vendor,” he said.

And to those firms using Excel for accounts, he suggested they get software designed for the task.

For the firms, representing 45 percent of the global data spend, using a purpose-designed subscription management system, the benefits are undeniable. On the vital issue of contracts, they include information not just on vendors but on which services are delivered and under what pricing structure.

Combine that with details of who in the organization is using the services and under what commercial terms and invoices become predictable down to single line items. Confidence grows that vendors are billing the firm correctly and that users can place orders at the right price.

Tracking this inventory makes it easier to spot duplicated services and equips managers to negotiate the best deal when contracts come up for renewal, for example with a survey of whether users still want all the services that have.

Of course, having this clarity on the data also reduces compliance risk and makes potential audits less painful.

Some spend management systems may go further, to what Mundell called analytics – using tools to spot trends and patterns. It’s good, but it’s not insight.

Lightbulb moment 💡

“What we are trying to get to here is insights, the story of the data, the ‘Aha!’ lightbulb moment which tells you what’s going on in your spend landscape and how you should take advantage of it.”

(This is when you should really see the video). Watch as Mundell turns the stark fact of an alarming 3 million euro rise in costs into the reassuring insight that this extra spend reflects the addition of a news business line at the firm, a sub-inflation price rise for the license, and cancellations as some users left the company. “Aha!”)

“We’ve moved on from the Matrix so seeing a much clearer picture of what’s going on,” Mundell said.

He called on firms to insist on a paradigm shift by spend management vendors from tools that require managers to sift through buckets of data to dashboards and visualizations tailored to specific roles, automated trend analysis and commentary.

True story

With this, “we can see the true story of our market data subscription landscape and truly optimize it.”

Where can a data manager get these insights? The answer is TRG Screen’s brand new Optimize Insights, the latest phase of TRG Screen’s investment in its Optimize platform.

Optimize Insights unlocks data-driven intelligence and actionable insights giving users unparalleled transparency on data spending, usage and much more, leading to calls for action that can deliver significant cost savings and efficiencies.

HubSpot Video


For firms too busy to run a subscription management system, Optimize Insights is available as a managed service with all the benefits and optimizations.

Podcast

Want to listen to our podcast on escaping the Matrix? Podcast host Helen Disney is in conversation with Richard Mundell, Chief Product Officer at TRG Screen, to discuss what the film The Matrix has in common with market data subscription management? Two seemingly very different topics that Richard helps us to unpack.

 

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