Market Data Strategies Need Updating: Survey

Respondents to a Refinitiv Survey about market and reference data strategies at their firms have highlighted the need for “drastic cultural changes” in their firms and a rethink on how they use data management as part of a wider update.

74% of respondents said their firm’s market data management strategies had not changed in the past 10 years, and more than 80% agreed that regulators are going to become increasingly focused on data governance, lending an urgency to the need for change. Further, 76% of respondents say that improving how they manage market and reference data will require drastic changes in their organisation, technology or strategy, and 67% say there is a lack of understanding in their organisation as to how firms can most effectively leverage their spend on data.

The good news is that 84% of respondents say their firm is either putting in place, or investigating, an operational resilience framework.

Refinitiv says it conducted the survey of almost 1,600 employees in March and April of this year – their roles span front, middle and back office, as well as infrastructure IT and support. The main challenges in managing data were equally seen as consistency from different providers and channels; remote working; incomplete data; intra-firm connectivity across front, middle and back offices; and slow delivery. Just 3% of respondents thought there was “no challenge”.

Refinitiv says a second challenge for executives is meeting the demands of the use cases that are emerging within their organisation, including artificial intelligence (AI) and machine learning (ML).

AI and ML issues concerning market and reference data include data security (38% of respondents say their organisations experience challenges with this), data quality (32%), and having the right data (31%).

The third challenge is fostering the necessary cultural change. Firms don’t just face technology and data challenges when revising their approach to market and reference data – they face serious cultural ones, too, the firm says in a blog post, adding that 78% agreed that integrating new market and reference data strategies will require a completely different mindset and attitude from employees. Also, 64 percent of all respondents agreed that there is a reluctance to change the way their firm operates because of the disruption that it may cause.

Unsurprisingly, the survey finds that firms are planning to invest in more data – particularly to enhance data for AI and ML use cases (36%) and to expand coverage/geography (34%). Firms are set to spend on more market data feeds, including both direct feeds and aggregated feeds, as well as in reference data, according to the survey results.

Firms are also seeking to invest in enhancing their data management infrastructure by moving more data storage and data use to the cloud. Popular use cases reported by front office respondents include powering trading and risk systems with data and analytics (41%), executing trades and performing execution analysis such as transaction cost analysis (TCA) (36%), storing historical data (39%) and using machine learning to detect trading patterns (33%)

Firms are also investing in data governance, including the infrastructure that supports data governance. This includes data entitlement solutions – 26 % of survey respondents already have this software in place, while 42% have plans to implement an automated solution, as well as activities including either presently undertaking or investigating ‘ensuring greater monitoring’ (94%), ‘increasing cloud and off-premise data storage’ (85%), and ‘increasing data coverage’ (88%).