Market data spend hits another record 💰 as complexity grows

Spending on financial market data and news hit a new record in 2023, highlighting the value banks and other institution place on the these vital streams of information that drive their business. 

“Market data remains one of the biggest costs faced by financial institutions .”

Global spend on financial market data rose by 12.4% on the previous year to $42.0 billion, with survey participants forecasting that it will exceed historical growth rates in 2024.

A respected annual report by Burton-Taylor International Consulting said spending has touched new highs every year for a decade. 

It will come as no surprise to firms who are already having to pay more for data, that fees have risen by 30-60% in the past two decades and, driven by rampant global inflation, by 5-10% in 2023 alone. A contributing factor to the upward trend in spend.

Other growth factors

Like many other industries, market data consumers are arguably still dealing with the consequences of the pandemic. Market volatility during Covid and the economic upheaval that followed, fueled increased data demand. At the same time, what looks like a permanent shift to hybrid working meant firms needed more licenses, raising costs and potentially making it harder to track compliance with vendor contracts.

The increased demand for data triggered strong growth in alternative data, and it continues to expand. A report by San Francisco-based Grand View Research valued the global alternative data market at nearly $4.5 billion in 2022.

Analysts expect “alt-data” to undergo a compound annual growth rate of up to 55% between 2022 and 2030. This means more data sources need to be acquired and managed and typifies the relentless growth in complexity of market data. 

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The edge 👀

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"Everyone is looking for that edge," said Leigh Walters, president of enterprise subscription management company TRG Screen, whose 500+ customers range from huge global banks and asset managers to small hedge funds.

It is not just financial institutions that struggle under the weight and complexity of their data subscriptions. TRG Screen includes law, energy and professional services firms among its clients and all rely on data to serve their customers.

2024 could be a challenging year 🤔

Arguably, keeping track of burgeoning data spend and usage and the requests for ever-more feeds has never been more important. For many, it has never been more of a headache, given tight budgets and headcount cuts in response to the pandemic.

Managing market data is a multi-faceted operation. Of all the data sources coming into the business, which are the most important? Have some become redundant as users’ needs have changed?

Who is using what data and how often? Do they really need all the data sources they can access or would different, perhaps cheaper datasets be more appropriate?

As sources of data proliferate, is there duplication, with the business paying two vendors for the same information? Is everyone licensed for a particular service even still working for the company?

“Arguably, keeping track of burgeoning data spend and usage and the requests for ever-more feeds has never been more important.”

Driving blind 👩‍💻

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"If you don't have that visibility, you're driving blind," Walters said, adding that large companies with a subscription management system or small firms with none were all looking for great transparency.

TRG Screen, with more than 20 years of experience, is the only vendor offering solutions to manage data spend, usage, compliance and enquiries – the entire lifecycle of subscriptions.

Now it is phasing in a new platform combining the best of its existing products and groundbreaking analysis of how to get the most out of subscriptions. This brand new platform is Optimize and promises unparalleled clarity on an enterprise’s data landscape and, for the first time, tailor-made actionable insights on how to enhance efficiency and save money.

Insight 📊

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This is no longer the case, at the apex of the new platform is Optimize Insights, which uses AI to deliver the ‘whole story’ of a firm's datascape to the data manager's screen, along with actionable recommendations for cost savings and greater efficiency across all aspects of a subscription.

Real-world “do this now” suggestions will be displayed on the manager’s dashboard. “There are trends we can see by looking at the big data and all the different correlations that you’d never be able to see as a human being,” Walters said.

Not only does Optimize Insights bring together data from a whole suite of TRG Screen products, it allows users to pull in their own data from internal applications and third-party systems via API links and extensions.

“We are showing our customers a narrative about their optimization opportunities.”

The company says clients who adopt TRG Screen solutions benefit from centralized management of their subscriptions, including global agreements with data vendors and greater use of automation.

On top of that, the complete visibility that comes with Optimize Insights means licenses are allocated more efficiently and other wastage eliminated.

These measures deliver rapid improvements in return on investment (ROI), leading to
cost-savings of around 2-10% by just cutting redundant and duplicate market data
services and subscriptions through greater inventory transparency and control.

A clear benefit of seeing the big picture through Optimize is that it becomes easier
to leverage a firm’s whole spend on data in negotiations with a vendor, rather than
renewing contracts piecemeal as they come due.

Compared with handling individual invoices, some TRG Screen users have saved up
80 percent.

Managed service ✅

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Optimize combines all the power and capabilities of TRG Screen products to handle the most complex and highest value enterprise subscriptions.

However, the company acknowledges that not all data users need the same solution.
TRG Screen therefore offers a smart managed service, run by its own team of market data specialists, that can handle anything from invoicing to full management of all aspects of market data and information subscriptions.

The data market will continue to grow 🚀

It is clear that the data market will continue to grow in terms of volume, breadth, complexity and cost, while experience shows that pressures to do more with less will only intensify. Industry insiders are clear that the unavoidable first step to taking control of this rapidly changing landscape is for users to ensure they have the whole picture of their data subscriptions 24/7.

That way lies insight and the opportunity to optimize data consumption and make significant savings.

“Not only do we give you insights, we give you the real
next-generation, cutting-edge business intelligence
capability,” Mundell said.