Managing market data subscriptions and costs - A complete workflow
In this article you will learn how a complete workflow for market data subscriptions, subscriptions data invoicing, administration, management, reporting and strategy can help your business.
Market data sources exploding
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.
• These providers include the traditional set of market data vendors that supply the critical 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 raft of completely new providers, some from unlikely sources, whose so-called ‘alternative data’ is being used by firms to exploit new market opportunities.
Licensing 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.
• The propensity for working from home due to the Covid-19 pandemic 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.
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.
This is in addition to having to make monthly and annual usage declarations to increasing numbers of exchanges and vendors.
Smaller firms, meanwhile, often don’t have the resource nor the 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 represent the best approach to dealing with the huge administrative challenge.