Asset managers, wealth management firms, banks, and broker-dealers globally are opening their wallets for market data.
Spending on market data is expected to increase by 10% or more next year in priority areas including equites, fixed income and alternative data, and by at least 5% across other asset classes.
Those projections are based on the results of a recent Coalition Greenwich study, in partnership with SIX, for which the firm interviewed 79 buy-side and sell-side market participants in the United States, European Union, the United Kingdom, and APAC.
“This upward trend in spending reflects more than just the annual increases baked into contracts; it reflects strong and growing underlying demand for market data,” said David Easthope, Senior Analyst for Coalition Greenwich Market Structure & Technology and co-author of Market Data Spending Is on a Roll.
Despite being more expensive, select market participants are also gravitating to real-time data. Nearly three-quarters (72%) of study participants use at least some real-time data during a typical trading day.
Across the board, market participants are willing to pay up for high-quality data, with two-thirds of study participants citing issues with data accuracy as a primary reason to switch data providers. In contrast, only about a third cite costs of data licenses and technical costs of data as important drivers.
Specialized Needs, Localized Purchasing Decisions
Due to increasingly specialized business needs, decisions about market data purchasing and licensing are made primarily at the regional or business-unit level, as opposed to globally.
“Market-data vendor selections are most often made at a local level among professionals,” said Audrey Blater, Senior Analyst for Coalition Greenwich Market Structure & Technology and report co-author. “That’s especially the case in Europe, where investors demonstrate clear, localized preferences for data providers with strong European market structure expertise.”
Market Data Spending Is on a Roll analyzes what drives global buy-side and sell-side market participants in their purchasing decisions across asset classes, as well as decision-making across the organizational structure.
Source: Coalition Greenwich
