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3 Challenges of Market Data Invoicing & Licensing

Information & data managers at financial institutions are being asked to administer an endlessly growing list of information sources, greatly adding to the burden of managing the already-challenging relationships with vendors.

Firms’ appetite for cloud-delivered services and the trend towards working from home are also testing existing data licensing norms. The sheer volume and variety of licensing agreements means firms’ data teams are increasingly stretched.

3 challenges of market data invoicing & licensing

3 Market Challenges:

1) Market data sources are exploding

Being asked to administer an ever-growing list of information sources is greatly adding to the burden of managing the already-challenging relationships with vendors. These providers include the traditional set of market data vendors - supplying the vital information that drive trading and investment processes.

Institutions today are also subscribing directly to services from a range of new providers, such as exchanges and other execution venues, which see data sales as an important and growing source of revenue. In some cases, they are consuming information from a number of completely new providers, some from unlikely sources, who’s so-called ‘alternative data’ is being used by firms to exploit new market opportunities.

2. Licensing is becoming more complex

At the same time, data licensing agreements and invoices are becoming more complicated, as are the associated usage declarations required by many such agreements. The complexity of services and the corresponding invoices from some key data vendors is growing as firms’ own activities diversify and their use of market data becomes more specialized.

With the Covid-19 pandemic pushing more people to work from home has added to the challenge, with many licensing agreements found lacking with respect to provisions for multi-site data consumption. The sheer volume, variety and complexity of licensing agreements means firms’ data teams are increasingly stretched.

The sheer volume, variety and complexity of licensing agreements means firms’ data teams are increasingly stretched.

3. Growing administration is overwhelming 

For large firms, this situation is creating a huge amount of administrative and licensing information to keep on top of, forcing firms to dedicate substantial resource to the task of validating and processing contracts and invoices. On top of that having to make monthly and annual usage declarations to growing numbers of exchanges and vendors.

Smaller firms, meanwhile, often don’t have the resource or internal expertise to deal with this complexity and volume. Where they have turned to outsourced services for help, expertise is often lacking, in the form of a firm understanding of the nuanced issues of contract management.

In short, data provision in capital markets and financial services is a highly dynamic marketplace. Policies and licensing rules change all the time, adding to the ongoing complexity faced by data managers, and forcing the question of whether existing internal processes.

Taking a Managed Services Approach

Do your firm's existing internal processes still represent the best approach to manage these challenges? Our latest whitepaper “Market Data Invoice and Inventory Managed Services” outlines in detail the challenges discussed above facing data managers as they grapple with the highly dynamic nature of data provision. It examines the growing complexity of data licensing and invoicing, and explores how a managed services approach can help firms stay on top of their vendor relationships and adopt a more strategic approach to information services procurement.

Want to learn more about easing the increasingly complex market data & other information administration burden?

Download whitepaper     Contact us

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