It is no secret that data management is a part of the financial services industry that has long been underfunded in comparison to other areas. To back up the anecdotal data that already exists about the plight of the data manager, the Financial Information Services Division (FISD) of the Software & Information Industry Association (SIIA) and Lakefront Data Ventures have published a salary survey aimed at benchmarking pay data.
To this end, FISD and Lakefront Data Ventures surveyed around 300 data managers from a range of financial institutions, including vendors, sell side and buy side firms, from North America and Europe. The two decided to partner for the survey to extend their reach into the market for a broader group of participants, says Dale Richards, CEO of Lakefront Data Ventures.
At the end of last year, Lakefront Data Ventures launched a website aimed at providing a job connection service for financial data management and information professionals. The survey is part of that endeavour, explains Richards: “After launching the industry job board, it was clear that a comprehensive survey and data collection would be a natural asset to the industry.”
The next iteration of the survey will likely include countries outside of North America and Europe, but the results for this year’s survey are solely focused on these two locations. With regards to geography, the survey respondents comprised of: around 30% of respondents from Europe and over 60% from North America. Reflective of this geographic split, most respondents were paid in US dollars (around 69%), followed by British pound sterling (around 19%) and euros (around 12%).
The largest proportion of respondents was from: the sell side (around 26%), data vendors (around 24%), exchanges (roughly 13%), buy side (approximately 12%), and software vendors (around 9%). The rest of the respondents were made up of retail banks, ratings agencies, hedge funds, custodians and consultants.
Moreover the largest proportion of respondents were from the management level, at around 51% of respondents, followed by senior managers (at around 11%). Although the largest proportion of respondents were focused on real-time market data (at around 52%), reference data focused individuals were the second highest category (at around 40%).
The highest category for overall average base salary for respondents was around US$100-150,000 (at around 31% of respondents); not particularly high, especially considering respondents were largely from the management level of an institution.
Despite the low salaries, data managers seem apt to remain in the data management industry; perhaps this is a reflection of the rewarding nature of getting data management right? The largest proportion of respondents indicated that they have been in the industry for more than 16 years (at around 38%).
Also no surprise is the gender split for data managers, which may be reflective of the financial industry as a whole, with far more male respondents than female: a 70/30 split.
In terms of focus and knowledge areas of expertise, most respondents seem to be specialists in market data and real-time data. This is unsurprising, given the bent towards market data professionals. However, reference data, data distribution, pricing data and historical data all scored highly from the back office point of view. The data provider that scored the highest with these respondents was definitely Reuters, with just over 40% of respondents indicating familiarity with its offerings. Bloomberg (at around 34%) and Thomson also scored highly (at around 30%) in this measurement. It seems that on average, hedge funds pay the highest base salary (at US$192,029) for those working in the data space; no surprises there then. Consultants (US$178,843) and ratings agencies (US$175,000) also pay their data management gurus a little more than the average, which seems to be from the figures at around US$130,000.
On the opposite end of the scale, retail banks pay their data managers the lowest salaries (an average of US$94,361), surprisingly followed by exchanges (at US$115,118). In terms of profession, it is obviously the senior managers that get paid the big bucks in comparison to the rest (at US$196,988), with lowly software developers languishing at the bottom of the pay scale (at US$76,993).
Surprisingly, smaller companies seem more apt to pay their data managers more highly on average (perhaps the hedge funds have some part to play in this), with the average base salary for companies of 1-10 employees at US$172,826. Those in companies of between 501-1000 employees fare the worst, at US$102,459.
Regional differences in terms of average salary are fairly significant, as North American data managers seem to fare better, with an average base salary of US$142,167, compared to Europe’s more modest US$119,413. The average base salary across all geographies, job categories and financial institutions for data management professionals overall is US$132,558.
Taking all these figures into account, the survey indeed confirms that data management is under resourced in terms of staff compensation. Given the importance that data has for financial institutions, without it they would cease to function, this under-resourcing seems both short sighted and impractical. However, the increasing regulatory scrutiny of data management and its increasing closeness to the risk function (which certainly garners more dollars than data management), this level of funding may change. Certainly, by providing this benchmark, FISD and Lakefront Data have provided fuel for the campaign.