Global spending on market data and information hit a record $37.3 billion in 2022, up 4.7% on the previous year, according to Burton-Taylor International Consulting, as the volume and complexity in data licensing exploded.
With the biggest banks spending upwards of $500 million a year on data, and smaller institutions spending on average $25 million, there is a lot at stake for any institution that struggles to optimize these vital data assets.
Typically larger and mid-sized financial institutions have dedicated departments managing market data costs on behalf of the organization. In mid-tier and smaller firms, the responsibility may fall to the procurement, IT or finance teams. In some cases, each business line may manage requirements autonomously.
Regardless of how market data is handled within your organization, you should find this an interesting read.
Unleashing the superpowers of the market data professional
While the intensity of knowledge will vary depending on the level of specialization, the team managing market data knows more about the data landscape than any other part of the organization – both internally and externally. They typically work in very close partnership with the business and their knowledge of vendors is unsurpassed.
That’s a powerful position to be in. Who else in the organization has this depth and breadth of knowledge?
Breaking free from the shackles of administration
But, the team can also find itself bogged down with important admin tasks to ensure the firm keeps track of its consumption and costs.
Is this really the best use of their time or are firms missing out on a valuable knowledge asset? What if those administrative duties disappeared? What if these experts were unleashed to help your business navigate the increasingly complex market data landscape?
Increasingly, firms are making this a reality.
Liberated to create value and opportunity
The key is to outsource essential tasks that are neither core competencies or value-generating activities. These tasks can be handed over to seasoned market data management experts with purpose-built technology under a managed service. With that in place, there are no limits to the value your internal market data team can generate.
Here are eight scenarios in which the team unburdened from day-to-day market data cost management can really add value.
1: Helping the business find that competitive edge
Those with market data oversight interact directly with the firm’s traders and other data users, fielding requests for information, and ensuring data gets to where it’s needed. At the same time, they have close relationships with the vendors.
Freed from vital administrative tasks, the team can leverage its valuable expertise and experience. A team liberated from admin would have more time to evaluate different vendor sources and could potentially influence content in line with business needs.
This could present a valuable strategic advantage for the entire business.
2: More informed, value-driven decision making?
Technology is changing and, with it, so is the role and importance of the team managing market data. Vendors are becoming more innovative so it is important that market data professionals have their fingers on the pulse of new opportunities that can drive value for the business.
This can also lead to cost savings as vendors introduce new or enhanced offerings that improve on the products from other vendors.
3: Providing value added services for clients
Free from market data administration, the team can also use its specialist knowledge to deliver added value for clients. They have the expertise, and now the time, to help the business to respond to the complex licensing questions generated by the increasingly sophisticated data needs of client execution portals and platforms.
4: Let’s talk: negotiating vendor relationships
Contract negotiations between suppliers and consumers of market data have never been more important. Such discussions, which may have huge and long-lasting financial implications, need to be undertaken by experts with a track-record of handling high-value contracts.
Should the team be deployed in the search for an even better deal or should they be kept busy with payments, inventory management and even service acquisition? How about outsourcing the admin so that you can increase your negotiation capacity?
5: What if vendors merge?
Recent mergers and acquisitions involving vendors, such as S&P Global’s merger with IHS Markit and the London Stock Exchange’s acquisition of Refinitiv, have repercussions for contracts. Inventory, processes and vendor frameworks need to be updated, ensuring the business continues to receive the data it needs in all its forms.
What’s more, consolidation in the industry means more potential monopolies and fewer vendors. The market data team needs to strengthen its partnerships with these vendors
6: Facilitating business transformation
Restructuring within a business is a frequent occurrence and can have implications for market data operational models. When it happens, the board wants assurance that the firm’s best people are handling any integration initiatives, while the day-to-day functions are in safe hands.
Integrating data subscriptions, preventing duplications, and ensuring licenses are up to date is a job for experts, and no one knows the data landscape better than the in-house team.
7: Consolidating data distribution platforms
Advances in cloud technology are enabling firms to reduce the number of platforms over which market data is distributed.
Clearly, the change would require licenses to be adapted to reflect the new distribution framework – an initiative requiring advice from the most experienced and knowledgeable people in the team.
8: The key to becoming insight-driven
In all these scenarios, teams managing market data can focus on high-value tasks thanks to a managed service provider handling the everyday processes of data subscription management.
Without a managed service supporting them, the risk is that the in-house team is swamped with admin and its superior and specialist knowledge risks going to waste.
The right provider will combine expert systems with an expert team and best practice to help clients become more insight-driven and strategic in their market data cost management. In this way, clients can turn both internal and external drivers into opportunities and value.
Not just an internal support function
Of course, many in the industry already see the team managing market data as more than a support function. Everything the team does is focused on the needs of the business. Given their pivotal role between the suppliers and consumers of data, the team is also a source of cost control and savings.
Set them free!
It’s time to free up your market data team and its expertise by outsourcing admin to a managed service from TRG Screen. This leader in managing market data subscriptions in institutions of any size marries best-in-class technology and a team of in-house experts to lift the burden off any market data team.
With TRG Screen watching your back, the rest is up to you.
Want to learn more on our Managed Service offerings for all your market data cost management challenges?