The role of a market data provider always strikes me as being similar to that of someone conducting a very large orchestra, ensuring that all the instruments (no pun intended) are present and performing their roles, whether solos or in unison, and ensuring everyone keeps time with one another. However, I only know of one market data exec who is also qualified as a conductor, so how can everyone else ensure their market data runs harmoniously and doesn’t crash in cacophony?
First, assemble an orchestra of the right players for the music being played: there’s no point in investing in a heavy brass section if you’re playing Vivaldi’s Four Seasons, because you’ll still have to pay those musicians, even if they sit around doing nothing because you didn’t check your score. But if you object to spending money on violins, you may find yourself losing money when the audience demands its money back. To illustrate this, consider how Norwegian data vendor Infront has added mutual funds data from Morningstar to its terminal, in response to demand from clients investing in mutual funds for access to the Chicago-based vendor’s star and risk ratings. In a similar vein, Fidessa has added data from Bolsa Mexicana de Valores to its data products to support the vendor’s expansion plans in the region, acknowledging the importance of as broad a coverage as possible.
Secondly, how do you ensure your musicians are good enough? There may be experienced soloists that a conductor has confidence in—such as data technology startup Simplified Financial Information hiring veterans Andrew Miller and Ian Hillier-Brook to run its European business development. Alternatively, you can put musicians through their paces, just as Markit carried out a study of Social Market Analytics’ social media-based trading signals to establish their predictive capabilities before integrating the signals, and how SMA in turn is researching the potential for its signals’ use in the commodities and currency markets.
One your orchestra is ready, responsibility for keeping order falls to the conductor—everything from interpreting the music’s emotions to making sure the right instruments play louder or softer at the right time, and from spotting an out-of-tune note to keeping everyone in time. This last requirement is not lost on the financial data world: for any trading that requires fast execution to ensure the market doesn’t move between the time you place a trade and the time that trade is actually executed—accurate timekeeping is essential. This enables trading firms, vendors, exchanges and counterparties to measure their speed—and more importantly, where they are slow—and to ensure their timing is in harmony with each other. So services like the precision-time clocks being deployed in datacenters by Perseus Telecom that perform this “conductor” role will almost certainly become more prevalent.
And last but not least, what music do you want to play? Keep in mind, what’s popular today may not be after months of rehearsal. In the financial data world, research company Greenwich Associates has released a survey of the evolution of market data terminals. While showing broad satisfaction, the survey highlights a marked shift expected in the next two years from “view” to “do,” especially around mobile data services, predicting that capabilities such as trade execution, trade analytics and integration with execution and order management systems will become more important to mobile users over the next two years. For example, trade execution is seen as most important by 20 percent of those surveyed today, though 37 percent believe it will be most important in two years’ time. Over the same timeframe, functions such as quote, news and chart content, secure messaging and search features are expected to become less important though quotes, news and charts will remain the most important feature overall.
It will be up to market data’s “conductors” to bring these changes to life without spoiling the tune. So whip out your batons, and get set for a change in tempo!
Anthony and James look at developments pertaining to the Consolidated Audit Trail and wonder if big-tech companies could challenge traditional asset managers.Subscribe to Weekly Wrap emails
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