Market participants prioritize market data quality over cost, according to new study

by | Jun 8, 2023

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Over 90% of global buy and sell-side market participants agree that data accuracy and data feed reliability are the most important drivers when choosing market data providers.

These results are revealed in a new research by Coalition Greenwich, a leading global provider of strategic benchmarking, analytics and insights to the financial services industry and SIX, the global financial information provider. 

The research– conducted in the second quarter of 2023 – spans 79 global respondents at asset and wealth managers, private banks, and sell-side firms in North America, Europe, Asia and Oceania, with 77% of respondents in front office roles. The majority of respondents cited overall quality as being more important than the cost of market data. This trend was most prevalent for buy-side participants, for whom costs fall even further down the list of considerations. 

Going beyond current functionality, the study also finds technology continues to shape decisions concerning buy-side and sell-side provider choice. While the industry currently stands at a 30% cloud adoption rate, the use of cloud technology and APIs in market data delivery is set to become more widespread. Over the next three to five years, more than half (64%) of participants believe the cloud will emerge as the dominant market data delivery method. 

Further, 76% of respondents are demanding access to real-time market data, on top of other streaming frequencies. For brokers and investment banks, this figure rises considerably to 94%. Changes in preferred data frequencies can be attributed to different use-cases, respondent roles and market structures and allow firms to minimize response times and enhance market transparency, to provide greater value-added services to clients. 

Commenting on the findings, Shai Popat, Managing Director, Product & Commercial Strategy, Financial Information, SIX highlighted: “The role of data in decision making has always been important, but now more so than ever. As this research highlights, other key factors including accuracy of market data, speed of delivery, and growing costs are equally important. With the cost of market data predicted to rise again over the next 12 months, it is significant that data quality came top of the list of concerns. Firms who can adapt more quickly to market changes will be able to provide greater value-add to their client base, drive forward cost reduction through the application of new technology, and ultimately increase efficiencies.”

Audrey Blater, Senior Analyst, Market Structure and Technology, Coalition Greenwich added: “There is a real desire to procure more market data so that coverage gaps are filled and service expansion needs are satisfied. Financial market professionals are seeking very high data quality, streamlined delivery and feed reliability above other data provider characteristics. As a consequence, providers are being tasked to offer cutting edge technology to deliver this information efficiently to their clients.”

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