In the aftermath of the Sept. 11, 2001 terrorist attacks, financial firms united to pick up the pieces of an industry almost torn apart, sharing space with rivals for the good of the industry overall. The market data world was no exception, with vendors shipping terminals gratis to hastily-erected trading floors in hotels, and even arch-rivals Cantor Fitzgerald and Tullett Prebon collaborating on market data products (IMD, Feb. 25, 2002) to keep essential data flowing.
Eleven years on, this spirit is still in evidence, though the time of crisis has past and old rivalries have long since been rekindled—in some cases, with intense ferocity. But aside from some cases where old rivalries die particularly hard, or where companies see collaboration as a threat to some proprietary advantage, for the most part, the industry appears as eager as ever to work together when it benefits all involved—and, of course, when it benefits them in terms of profits.
This week, we will see participants from across the end-user, vendor and exchange communities come together at our European Financial Information Summit in London, giving up their time to share their knowledge, educate others, and learn from their peers. And in this week’s issue, we see collaboration in evidence at every turn—Russell Investments enlisting Revere Data to create indexes that show companies’ exposures to revenues from emerging markets; S&P incorporating fundamental data from Dun & Bradstreet, and Morningstar incorporating content from ratings agency Fitch.
These arrangements not only allow vendors to present a more comprehensive offering to clients, but by leveraging that data, they can also target new audiences beyond their traditional base that they would otherwise be unable to reach, as Ian Rothery, global head of third-party distribution and strategic partnerships at Fitch Solutions, points out about the vendor’s agreement with Morningstar. Speaking about a separate deal to make Fitch’s ratings available via Deutsche Börse’s AlphaFlash feed of machine-readable macroeconomic news, Rothery explains, “They have the technology, delivery infrastructure and clients, and we have the content. So we wanted to work closely together and leverage each other’s content and delivery… rather than either of us having to spread ourselves too thin.”
The spirit of collaboration is not just limited to vendors and self-interest. End-users also appreciate the value of partnerships. For example, Marketocracy, a mutual fund that trades based on crowd-sourced research and commentary that it also provides as a dataset, has enlisted EAB Investment Group to provide an options hedging component to its investments. On a broader level, end-users have long seen the value of working together via industry associations such as FISD and Ipug to address industry-wide issues or bring pressure to bear on new data fees, such as Bloomberg’s most recent increase for its terminal product. In addition, especially during periods like the last few years, when budgets are strained, some data managers have found benefit in enlisting providers as close “partners,” willing to work more openly and proactively with firms to reduce costs—though it seems that just as many eschew this approach in favor of a stricter vendor-client relationship.
Eleven years on, the world is still a turbulent place—and so are the financial markets. But many of the world’s—and the financial markets’—problems can be solved by uniting and working together. Even the tragedy of Sept. 11, 2001 couldn’t dampen that ultimately most human and social spirit of collaborating to help each other to haul ourselves up and out of crisis: when times get tough, we stand together for the greater good. And by working together, we can all aspire to become something greater—whether as professionals or as human beings—than we could ever achieve alone.
James and Anthony talk about the looming Sibos event in Toronto and take a look at some recent M&A activity and blockchain developments in the capital markets.Subscribe to Weekly Wrap emails