Following two years of development and investment in its flagship and three subsidiary solutions, new data vendor on the block FactEntry is finally ready to begin pitching its wares in earnest, according to Sandeep Dhingra, director of the Indian-based start-up. Thus far, FactEntry has bagged two vendor clients for its Fixed Income Database Objects (FIDO) solution in the form of fast growing derivatives data specialist Markit and data giant Thomson Reuters.
Dhingra, who used to be a bond trader in a former life for both BarCap and UBS, and later worked for Markit Group, saw an opportunity in the credit derivatives space to source the underlying reference data for these instruments. During his time at Markit, he recognised a business need that he felt could be better met by a solution focused on finding the underlying source documents and data for fixed income instruments, hence FIDO was conceived.
The focus was to achieve a certain level of consistency between the reference data sets of the world of cash and that of credit, he explains. FIDO therefore provides a data set for users that are attempting to calculate bond valuation or cash flow data by providing access to bonds terms and conditions data. It provides issuance details for government, corporate and municipal bonds, which Dhingra describes as the more “granular” level of bond data.
During the process of development, Dhingra also spun off a number of subsidiary data products from the overall FIDO offering, including the Corporate Action Tracking Service (CATS), Mapping Instrument Service (MIS) and Total Entity Debt (TED). CATS allows clients to monitor credit derivatives with entities mapped to Markit RED codes or a number of other identifiers. “The corporate actions data feeds in the market are traditionally more focused on the equities side of things,” says Dhingra.
TED allows users to identify the outstanding debt for an entity in the credit derivatives market and this solution is a key area of development focus for this year, he explains. “In the ever changing credit derivatives market, information on changing debt levels of an entity can make the risk more transparent and less speculative,” he adds. “TED extends beyond FIDO into a firm’s internal systems data.”
The MIS is more of a service than a solution, which is targeted at allowing users to monitor changes in their asset classes as a result of corporate actions events or changes in the feeds from their data vendors. “MIS basically is a consultancy service aimed at providing better data integration between asset classes. It allows users to relate one asset class to another,” says Dhingra.
The area of fixed income data that FactEntry is specialising in is therefore traditionally a low margin and high resources endeavour. “It takes a lot of effort to locate the right underlying data and it took us two years to get to the point that we are at now, with 38 analysts based in India sourcing this data,” he explains.
Rather than throwing technology alone at the problem, it requires people to be able to understand and locate the correct data, which could make the proposition costly. However, the decision to base operations out of India has meant that offshore labour costs are lower and more sustainable, according to Dhingra. The vendor has spent the last two years building up its database before coming to market in earnest. Most of the work in terms of sourcing the data on the 65,000 bonds currently in the database has been done over the last year, he adds.
The vendor has also taken the decision that rather than taking the product direct to market, it is selling to the vendor community in order to benefit from their market reach and scale. Dhingra has a whole host of vendors on his list to approach next, including data players such as EDI, Telekurs and Interactive Data. “The data that they may have trouble sourcing in-house, we find for them,” he explains. “Because we specialise exclusively in this market sector, we can provide the data in a much quicker turnaround time.”
As for the future, Dhingra is hopeful to be able to extend the products’ reach to the buy side firms, who he believes are keen to receive this data but have much leaner operations and very few internal resources to find it themselves. He is keen to find a suitable vendor to partner with in this space in order to bring the solution direct to market.
The focus will also be on building up the overall database for the vendor’s products, with a short term goal of 100,000 bonds. “We provide consistency of data, are commercially cheaper and achieve better turnarounds than the bigger vendors,” says Dhingra. “The focus now is on adding scale.”
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