The presence of proprietary standards for evaluated pricing data in Brazil handcuffs that market from shedding its "emerging" label.
The opportunities that emerging markets typically offer, especially when established and mature markets aren't doing so well, aren't always as great as they might seem at first glance. Recently, Inside Reference Data reported on the scarcity of evaluated price information in emerging markets, which is an obstacle to getting accurate and fast pricing data. An evaluated pricing professional observed that in any new market, information is generally going to be scarce. Developing markets aren't able to match the timeliness of data delivery seen in developed markets.
Therefore, firms doing business in the developing markets have to spend to support their front offices' abilities to get timely data sources. The key to spending wisely toward that goal, however, means taking a wider view of what areas within a firm are keys to achieving faster data, including personnel, infrastructure and operational professionalism.
Add to this the other hurdles for data management in emerging markets, particularly proprietary standards – specific to a single country's markets. The Brazilian markets are a good example of this. Brazil has in some ways graduated out of emerging market status, achieving greater transparency and attracting data providers and services both large and small. These outside providers face competition from established local providers who have an advantage of being better suited to their home turf. The outside providers' infrastructure can be too far ahead of what Brazilian systems can accommodate.
Having such incompatible standards seems counter-intuitive when organizations such as Swift are trying to make data and messaging standards compatible and consistent worldwide. The industry co-operative is making inroads in working with the relevant parties in that country. "We have to be able to go after local markets and ask what we can do to help the industry with transaction flow to Latin American markets or make it more consistent and standardized around the world," says Eileen Dignen, managing director, banking accounts and initiatives, at Swift.
The outside data providers in an emerging market such as Brazil will have a harder time focusing their investment on improving the quality and speed of data if proprietary standards remain the only game in town. Addressing this issue is a necessary step for a market that is trying to shed its "emerging" label.
While at Sibos Toronto, James shares some interviews covering topics on blockchain, fintechs and cybersecurity.Subscribe to Weekly Wrap emails