Coalition Greenwich and SIX have revealed the results of their joint survey which delved into the motivations behind the adoption of market data technology, as investment continues to grow, and suggested how future use could develop.
The businesses conducted the survey in Q2 2023, analysing responses from 79 market participants from both buy- and sell- side firms across Europe, APAC, and North America.
Discussing the top priorities when selecting a market data vendor, 90% of global market participants agreed that data accuracy and data feed reliability were most important factors. This opinion was most prevalent among buy-side individuals, who rated cost as comparatively low in terms of the top considerations.
Shai Popat, managing director of product and commercial strategy, financial information at SIX, said: “With the cost of market data predicted to rise again over the next 12 months, it is significant that data quality came top of the list of concerns.”
Half of the of respondents confirmed that they expected market data budgets to increase by up to 5% in the next 12 months, however the report made clear that it is technology more than anything which continues to shape decisions regarding providers for both the buy-side and sell-side.
Currently, just a third of market participants utilise cloud technology, however this is projected to grow, along with APIs. Speaking to their increased use, 64% of respondents agreed that in the next three to five years the cloud will become the dominant market data delivery method.
Popat highlighted the importance of moving quickly in the face of a fast-moving market: “Firms who can adapt more quickly to market changes will be able to provide greater value-add to their client base, drive forward cost reduction through the application of new technology, and ultimately increase efficiencies.”
Relatedly, 60% of survey participants confirmed that the market would benefit from more vendors. Audrey Blater, senior analyst in market structure and technology at Coalition Greenwich explained that it is the demand motivating the supply: “Financial market professionals are seeking very high data quality, streamlined delivery and feed reliability above other data provider characteristics. As a consequence, providers are being tasked to offer cutting edge technology to deliver this information efficiently to their clients.”