Why Market Data Consumption is Trending Up

By Lynn Martin, President & COO, ICE Data Services

As president and chief operating officer of ICE Data Services, I’m fortunate to interact with many of the world’s biggest consumers of market data. From global asset management firms and wealth advisors to trading desks and risk management officers, over the last 2 years I’ve had the opportunity to hear a variety of perspectives from data users who all have one thing in common: they’re using more data now than ever before.

When you think about the trends defining how companies do business today, one of the first thoughts that comes to mind is the need for high performance data across the full organization. Companies are building systems to consume complex information quickly and in a manner that gives them a competitive edge – and that means they need access to as much data as possible, as quickly as possible, and tools to help them make sense of the multitude of data inputs.

4 Trends Behind the Demand for More Data

1. Global economic growth.

Compared to the world economy 50 years ago, today’s economy is over 6 times as large1. Markets have become more active, with millions of trades executed every day across hundreds of electronic trading venues. As a result of a significant increase in activity and liquidity, the amount of information available has multiplied exponentially. As global markets continue to expand, users have identified an increasing need to aggregate and make sense of the world’s information.

2. A laser-focus on informing the full organization.

As industry competition increases and companies look for new ways to get an edge, their focus is on how to best equip their employees with high-quality information. Efficiently consuming and distributing data throughout all levels of an organization enhances operational efficiencies and effectiveness.

3. Feeding inputs into trading programs.

The drive for a competitive edge has led to an increased use of automated trading strategies, which are designed to help companies achieve greater efficiency and decrease operational error. Using a quantitative trading program can enable companies to react to market shifts as they occur, thereby potentially strengthening risk management. As the use of programmatic trading increases and these strategies grow in complexity, there’s a growing demand for comprehensive sets of data to support automated programs.

4. Regulatory requirements.

Market participants are facing a horizon of unprecedented challenges when it comes to meeting global regulations. Company expectations around process and reporting are becoming more stringent than ever before, whether you’re thinking about international banking rules under Basel III, MiFID II in Europe or the SEC’s new liquidity and report modernization rules in the U.S. Similarly, increasing regulation around areas such as execution quality, liquidity risk and pricing have introduced a need for independent, unbiased validations of a company’s internal processes and assessments. These regulatory requirements will impact all facets of organizations, and users require services that help them meet regulatory requirements in a seamless, and transparent manner.

Market forces have raised the demand for comprehensive, flexible global market data that enables companies to perform competitively, manage risk and meet reporting obligations. As ICE Data Services, my team develops the data solutions to meet customers’ needs. We’re shaping the future of information to give you more choice and flexibility as you integrate data-driven solutions into your organization to help you analyze markets, comply with regulation and drive your business forward.

 

1Source: http://www.imf.org/external/pubs/ft/fandd/2014/09/kose.htm