One of the investment management industry's most pressing issues is to better manage the ever-increasing deluge of market data. Key to this challenge is quickly and cost efficiently integrating market data into the growing number of end-user applications.
A siloed approach where each department or group maintains its own market data solution is no longer feasible given the redundancies and overhead.Â Instead, to optimize transparency and rein in costs, firms must embrace a more holistic market data solution, one that powers everything from internal research portals and portfolio management systems, to compliance reporting and mobile applications.
Introducing the market data cloud
Cloud technology is beginning to revolutionize market data management, marking a radical shift in the way investment management firms consume data across the enterprise. Market data clouds enable firms to bypass the sizeable investments in infrastructure, hardware, software, and maintenance that are typically associated with traditional datafeeds. Utilizing this new type of market data solution helps firms gain economies of scale, lower costs, and increase agility.
Below are five key investment management technology challenges that are addressed by the adoption of a cloud-based market data solution. Future posts in this series will expand on each of these areas.
Investment management technology challenge #1
Transforming the deluge of market data into an asset
In the wake of the recent economic crisis and market downturn, it's more essential than ever for investment managers to broaden the scope of their research efforts. This requires finding a way to incorporate new sets of market data into the investment process without getting bogged down in technical data management issues.
Accessing market data via the cloud enables investment management firms to incorporate broad sets of real-time and referential data quickly on demand within proprietary in-house systems and 3rd party applications. The market data cloud's flexible, easy to implement delivery methodology reduces the frustration of dealing with traditional data delivery methods, enabling immediate access to a wide range of financial instruments to get new investment strategies up and running quickly.
Investment management technology challenge #2
Reducing market data expenses
As investment management firms look to cut costs in today's highly competitive environment, market data expenditures are an obvious target. One of the largest outlays within this cost center is market data terminals, which don't align with evolving business needs for data flexibility. Terminals target the fat part of the bell curve, but as firms increasingly look to differentiate themselves with new strategies their needs become more unique, the curve flattens, and terminals become less relevant.Â With desktop terminals, you pay a premium for data sets that you don't use. Firms with multiple terminals pay for the same data multiple times.
In contrast, a cloud-based market data solution enables investment management firms to more easily develop custom research portals and applications that better address the exacting needs of each internal constituency. And the on-demand pricing structure of the market data cloud is based on actual usage.Â This means that custom apps and portals designed to a firm's specific requirements can result in much lower overall market data spend than market data terminals.
Investment management technology challenge #3
Streamlining and simplifying portfolio and compliance reporting
Demands for improved transparency have made reporting infinitely more complex. New regulations have resulted in onerous reporting requirements that are made even more difficult by inflexible systems, and the inability to quickly integrate market data.
A cloud-based market data solution allows firms to instantly enrich their regulatory and investor reporting with comprehensive coverage of real-time, historical, and reference data. No infrastructure required.
Investment management technology challenge #4
Creating branded, data-rich mobile apps that differentiate
In an increasingly connected world, customers expect detailed real-time market information wherever they are, whenever they want it. One way to differentiate from the competition is to provide data-rich mobile applications that showcase a firm's retail offerings and keep customers coming back for more.Â Problem is, integrating market data into mobile applications using traditional datafeeds requires extensive development.
A cloud-based market data solution is well-equipped to meet mobile application challenges head on. Cloud-based web APIs stream real-time and referential data to mobile apps seamlessly. With a market data cloud, firms can reduce the development cycle and launch Android and iOS applications in less time.
Investment management technology challenge #5
Seamlessly integrating market data into proprietary Excel models
Microsoft Excel remains a central application in the investment management workflow. Incorporating market data can be cost prohibitive using Excel add-ins from traditional data vendors, and these add-ins don't always include access to the full range of data required.
A cloud-based market data solution seamlessly delivers information into Excel via flexible web APIs. All that's required is a few lines of code and an internet connection.Â And with on-demand pricing where you only pay for the data that's used, it can help investment management firms reduce market data budgets.