Talk to a market data manager at any firm, and chances are they view vendors and exchanges as money-grubbing monsters that exist purely to squeeze revenues from their hapless clients with little thought to customer service or satisfaction.
But for most content and service providers in our industry, this isn’t true: few enjoy the monopolistic position or size to be able to exploit their position, and of those that do, most no doubt realize that incumbency and stickiness only lasts as long as a contract term, and that winning and retaining business depends on being able to offer a suitable level of customization for each client, regardless of how generic one’s core product or service is.
For example, analytics provider Corellasoft has spent the past two years creating a single, consolidated technology platform, on top of which it can build bespoke analytics solutions tailored to specific customer needs. The vendor has already gotten some traction with this approach, says chief executive Misha Kipnis, citing two unnamed bank clients that have deployed applications for analyzing bond prices and for analyzing a firm’s trading performance. In fact, while Corellasoft’s clients need to deploy the vendor’s core Visual Edge platform, each client deployment requires individual configuration, and any analytics built using Visual Edge are customized to the client’s needs—so clients benefit from the enhancements and bug fixes that come from having a standard platform, along with the additions of a custom install.
Meanwhile, London-based analytics provider OTAS Technologies will next month roll out OTAS Views, which allows users to create customized screens covering different aspects of the investment process, allowing firms that use fewer numbers of metrics for spotting risks and opportunities to “embed their own fundamental approach into the tool.”
While the need for customization may be most acute in analytics-related fields, other critical areas also require certain levels of customization to achieve the performance they need. And no matter how standard a service is, its provider can differentiate itself by providing customization around how it delivers the service. For example, while Thomson Reuters’ Elektron feed is designed to provide a single global source for the vendor’s data, its new points of presence in Johannesburg, Mumbai, Seoul and Toronto are a nod towards providing more customized access for clients in those regions. Meanwhile, the expansion of the vendor’s managed services network to new datacenters in Mexico City and Toronto provides custom client service by allowing firms to offload their infrastructure needs to the vendor within its co-location sites.
However, some managed services are not customized enough, says Rich Sigillo, who—along with former MDSL colleague Cindy Johnson—has set up Market Data Insights, which provides market data management as a managed service for firms that lack a dedicated market data function of their own. Rather than a “one size fits all” approach, MDI will offer more tailored services, covering market data administration, usage tracking, invoice reconciliation and administration, contract management and renewal or renegotiation, among other functions, and will “right-size” the resources applied to each according to clients’ needs, Sigillo says.
His point is why do something yourself if you don’t add any value? Equally, why do something yourself if you can’t do it as well as a specialist, who may even provide that service cheaper than you can deliver it in-house? Perhaps the trend towards demanding customization is cyclical: that while user firms’ budgets remain tight, they will continue to pressure vendors to deliver custom tweaks for them—and perhaps when (or if) data groups have more money to spend, they’ll return to buying basic services and augmenting them with in-house tools, and eschew managed services in favor of proprietary tools. Or, if vendors treat customers to the “custom” service they demand, perhaps service will trump control when the budget pendulum swings the other way.
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