The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

COVID-19 Exposing Market Data Gaps

In the move to business continuity measures (BCP) during the coronavirus chaos, some banks have managed better than others – and the crisis has exposed some glaring holes in the preparations of many major institutions. While the move to BCP appears to have gone relatively smoothly, the radical difference in the way firms are now functioning – and the new normal when it comes to remote working – means that while operations might be on track, some areas (such as access to market data) have not been as well prepared for.

Most firms have had an operational resilience plan in place for many years, and firms that invested into technology and infrastructure early on are now reaping the benefits. Many major banks have had these measures in place for decades, and swung relatively seamlessly into action regarding split sites, split teams, and of course remote working.

But while most people are getting on with the job, market data could emerge as one of their biggest stumbling blocks.
“In terms of data management, a lot of the vendors are quite limited in terms of how you can access their data,” explains an asset manager, who asked not to be named. “This could be a prompt to review market data licensing and data acquisition, in terms of efficiency under these situations. We are working with the vendors to get around these issues right now, but really it’s a question of speed – can we access what we need when we need it?”

There are also concerns in some quarters that firms may not have fully explored the options (or requirements) for market data access in their BCP/disaster recovery plans, which often cater for a site being destroyed (as with 9/11) rather than staff moving to remote locations as under the current situation.

Some providers handle this better than others. Bloomberg, for example, offers Bloomberg Anywhere, which allows subscribers to access their Bloomberg Terminal account from any PC or Mac through downloading software or accessing it through the cloud. The firm also offers its own disaster recovery service, providing users with access to their terminal subscription, including trade and post-trade services, with administrators able to grant remote access where needed. The service also offers off-terminal integration, partnering with Microsoft Office and providing custom applications from third-party vendors.

But of course, all this comes at a cost. According to one industry professional, banks could be paying an extra 175%-275% on their total market data spend (including vendor licensing fees, the technology cost of hosting the additional environment, management of the additional environment, exchange fees, etc.) to activate BCP market data access. “It’s an incremental reduction in profitability, yes,” he says. “But the banks can afford to pay – the cost of infrastructure is not an issue.”

Related content

WEBINAR

Recorded Webinar: Opportunities of new approaches to electronic trading

Challenged by legacy systems, less than ideal workflows and high costs, front-office trading teams lack the ability to adapt to clients’ evolving needs around integration, speed and multi-asset capabilities. They are also challenged by a capital markets environment characterised by legacy systems, shrinking margins and increased regulatory scrutiny. While these problems cause considerable friction in...

BLOG

The Rise and Rise of the Financial Data Marketplace

By Mike O’Hara, A-Team Special Correspondent. Data is often cited as the most essential resource in today’s global economy, with many of the world’s most valuable companies, including Amazon, Facebook, Microsoft and Google parent Alphabet profiting massively from how they collect, use and sell data. In financial markets, investment and trading firms have traditionally sourced...

EVENT

ESG Regulation, Reporting & Data Management Summit (Redirected)

This summit will explore challenges around assembling and evaluating ESG data for reporting and the impact of regulatory measures and industry collaboration on transparency and standardisation efforts. Expert speakers will address how the evolving market infrastructure is developing and the role of new technologies and alternative data in improving insight and filling data gaps.

GUIDE

Trading Regulations Handbook 2021

In these unprecedented times, a carefully crafted trading infrastructure is crucial for capital markets participants. Yet, the impact of trading regulations on infrastructure can be difficult to manage. The Trading Regulations Handbook 2021 can help. It provides all the essentials you need to know about regulations impacting trading operations, data and technology. A-Team Group’s Trading...