This is the fourth and final article in a series on the future of market data subscription management – read the first, second and third articles. We have summarized these 4 articles in an e-book.
More and more firms are now turning to specialist managed services to handle the complex and increasingly onerous administrative processes associated with market data.
The potential impact of this shift is nothing short of transformational. Imagine if market data teams – who work closely with the business and possess an unparalleled understanding of market data vendors, their offerings and licensing models – were completely freed from day-to-day administrative processes.
They could then direct their efforts toward exploring new data sources (in search of that elusive edge), unblocking knotty commercial issues and helping the business make sense of increasingly intricate use cases for market data. As firms are forced to constantly innovate with data, the in-house specialists who have the deepest knowledge of the data landscape can play a pivotal role in driving success.
With industry analysts forecast growth of 15-20% in the use of managed services over the next five years by financial institutions large and small, this is a solution whose time has come.
Crucial questions, the importance of technology
For sure, this is already happening but there is a snag – not all managed service providers specialize in the unique demands of market data management. Firms seeking to outsource their market data administration must ask crucial questions.
Can the provider offer complete transparency over market data costs? Do they employ specialized technologies and workflows or rely on generic inventory management tools? If they use a specialized market data inventory system, to what extent can they monitor usage? These considerations are vital for optimal market data management.
Some managed service providers still rely on generic procurement systems, which lack the sophistication needed to navigate the complexities of market data intellectual property (IP) costs and compliance. While some service providers may claim they can manage market data with these generic systems, they fall short.
It's crucial to partner with a company that offers purpose-built software, ideally developed in-house. Such a firm possesses a deeper understanding of the technology and can leverage all functionalities and best practices, significantly improving the return on investment for the outsourcing firm.
Masters of their craft, the value of an expert team
The most pivotal question to ask a potential managed service provider pertains to the quality and expertise of their team. Does the provider have individuals with deep knowledge across all aspects of market data management, cultivated through years of industry experience and rigorous training?
How do they ensure that best practices are ingrained in the relevant processes and workflows? Is the team experienced in all market data commercial management workflows, from handling service requests and contract renewals to data procurement and cost and usage reporting?
Such professionals are in high demand. Recruiting and retaining them is challenging, as some firms report investing in staff only to see them leave for other opportunities. Thankfully, that is not a universal problem. Some managed service providers have assembled teams of seasoned experts, who see the value of working across a diverse customer base in a service provider remit, and are committed to nurturing the next generation.
The critical components of a market data managed service
Some six months ago, TRG Screen appointed Nadine Scott as Global Head of Managed Services, who brings over two decades of senior market data experience from several tier-1 banks. Scott identifies two irreplaceable components of a best-in-class market data managed service.
“As I continue to engage with our clients, their feedback reinforces my belief that our managed services vision and value proposition is highly-tuned to the market’s needs. TRG Screen boasts the most comprehensive offerings to effectively tackle the complexities of market data commercial management,” Scott says.
She sees the value proposition comprising two components, the first is manpower. Scott admits training is a personal obsession: “We are creating the next generation. We are proactively sourcing people with the right work ethic, who care about their customers, pay attention to detail and have boundless professional curiosity.”
The second is TRG Screen’s expert systems, Scott says: “These systems are specifically designed to do more than just address the administrative hurdles of market management; they are geared towards creating strategic value by offering insights into the total cost of ownership and consumption related to industry issues and challenges,” Scott says. TRG Screen’s suite of market data and other subscription management products is acknowledged as cutting edge.
That is the value proposition – freedom to unleash the skills and talents of the market data team to the benefit of the whole business.
Time to step up
But Scott has an insight that should give pause for thought to any firm of any size that is still using a generic management system.
“Time and again we hear from firms walking away from generic procurement systems because they aren’t able to manage the critical and complex cost and compliance aspects of market data.”
She adds: “Not only do we have the technology, but we have the services that enables firms to outsource the admin. This gives them the reassurance that all commercials are handled in the best possible way. But, at the other end of the scale, the greatest value is achieved when we free up skilled market data resources to focus on projects that help the business grow. It’s one value proposition but with different scales of applicability,” she says.
Scott gives the last word on managed services to customers:
“Nothing I have heard in the last six months has changed my mind. TRG Screen is the only firm on the street with a road map for an integrated solution to meet the challenges that market data commercial managers face. That would have been invaluable in my previous roles, and everything I’ve heard from customers is fully in line with that.”
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