Asia’s growth is prompting changes to financial firms’ data requirements, leading to consumption of more data from multiple sources and forcing vendors to address the region differently from their business in other geographies, according to a panel of data providers at last week’s Asia-Pacific Financial Information Conference.
“A key change across Asia-Pacific is the proliferation of multi-sourcing of data. Whereas regulations like MiFID in Europe have seen mandates for multiple data sources, people in Asia have been happy with one source, but now we are seeing proliferation, leading to niche suppliers and Asia-specific data,” said Mike Meaney, managing director at Cadis.
In contrast, as cost becomes a bigger driver for financial firms, some clients are saying they have too many sources and are asking for simplification, said Dan Campion, head of Enterprise Solutions for Asia-Pacific at Thomson Reuters. “Everyone is looking to manage costs at the moment… but if you are going to drive towards multiple sources, as one of our clients says, ‘We’ve implemented the beast, and now we have to feed it.’”
Will Mateu, business development and sales manager for interdealer broker Icap in Asia-Pacific, says that new regulations are creating opportunities for exchanges to move into derivatives and over-the-counter markets, creating demand for more sophisticated information, prompting Icap to partner with specialist providers “to come up with the premium fuel to feed that beast.”
And for OTC and illiquid assets, this is creating demand for independent price verification services, Meaney said. “They have to price more curves on a daily basis and at multiple times, rather than just at market close… maybe not in real time, but certainly not just end of day—and that drives a tremendous increase in consumption of data,” he said, which is prompting firms to scrutinize the value and usefulness of each data source. “Once you have multiple feeds from multiple sources, you have the ability to understand whose data is causing more exceptions or faults.”
This is forcing vendors to act in a more consultative way that differentiates themselves from their competitors, and to form real partnerships with clients, Campion said, though the unique requests from Asia mean vendors must still take a different approach to the region than they do in others.
One key to cracking the region is a direct, committed presence, rather than relying on visiting staff from offices overseas. But this is becoming easier, Mateu said. “Adding footprint around Asia is an easier sell given that the prominence of the region has risen,” he said.