The Market Data Management Dichotomy: Budgets vs. Demands
Report Summary
The Market Data Management Dichotomy: Budgets vs. Demands
Pressure to manage increasing data volumes, expanded asset classes and geographies, and an onslaught of regulatory initiatives conflicts with persistent demand to cut cost.
Boston, April 14, 2011 – A new report from Aite Group provides insight into areas where market data management firms seek efficiencies in managing an onslaught of market data amid increasingly automated trading strategies. Based on an Aite Group survey of 67 market data professionals, conducted in Q4 2010 and Q1 2011 with the support of SunGard, Inside Market Data, and the Financial Information Services Division (FISD), the report highlights market data challenges, spending priorities, and the vendor selection process.
As more firms employ black-box trading strategies and quantitative models, which have an insatiable appetite for liquidity, market data demands are shifting away from terminals and toward ultrafast market data. Liquidity needs continue to expand as new markets and asset classes spring up and new geographies open to electronic trading. Market data has become one of the largest spending areas in most trading firms, and cutting costs is the highest-ranking business objective. At the same time, firms recognize the urgent need to improve market data infrastructure and expand connectivity for new feeds.
“Market data professionals will have a long year ahead of them if they and their technology-executive counterparts do not align their priorities,” says Adam Honoré, research director with Aite Group and author of this report. “While market data professionals require additional infrastructure and higher-grade technology, the average CIO ranks both low on overall spending priorities. Market data suppliers are going to see an uptick in business in 2011, but the terminal side of the business, which has traditionally been the money-maker, will see a palpable decline.”
This 28-page Impact Report contains 26 figures and one table. Clients of Aite Group's Institutional Securities & Investments service can download the report.