I wanted to share with you two recent insights.
Both relate to the frustration and concerns of reducing market data spend
……..and the exhilaration and deep satisfaction when you do reduce the recurring cost of your invoices.
The first is a recent Research report available through the A-Team
Buy-Side Firms Report Data Management Challenges and Solutions in Outsourcing
It stated:
“…..while 77% said their organisation requests the same data multiple times from a single data vendor, leading to unnecessary duplicate data costs”.
So we can conclude from this:
- The problem of optimising market data spend is not fixed
- There is still a challenge, and therefore an opportunity, facing the Buy Side (and from our experience the Sell Side too)
The second area of insight, relates to the results of our recent Kalaxis Rationalization Report projects. There is a very clear trend.
This trend are The Top 5 areas that can be optimized to reduce on-going spend. They are:
- Aligning the profile of requests to the correct product or service, to ensure optimum value for money
- Cancel Multi Requests, when the result of this is the market data vendor charges multiple times for the same data
- Better utilise internal market data repositories
- Rationalizing Accounts following mergers and acquisitions
- Reducing the scope of securities that are (unnecessarily) requested
The feedback from our clients, in addition to being delighted with the average identification of 28% savings, was how valuable the Report’s analytics engine is, the KDM Calculator. In particular the “What If” questions it poses and answers, such as: “What If” I add this / change this / cancel this, and many more.
My conclusions? There is still a job to be done, most firms are still not optimizing their market data spend, and the areas in which a great many of them think they have addressed and fixed, in fact they haven’t.
