Market data is a crucial and expensive success factor in the implementation of current business models of financial institutions. Therefore, efficient market data usage plays an important part in ensuring positive economic results for banks and asset management companies. In addition to this, market data owners such as exchanges, brokers, rating agencies, etc. are currently increasing their efforts to audit market data usage in financial institutions, which makes market data compliance ever more important. To increase cost efficiency and to avoid penalties, it is essential to have a clear and current picture of market data usage within a financial institution.
The current situation of many financial institutions with regard to transparency in market data usage within IT applications is characterized by the following challenges:
As a consequence, on the one hand financial institutions run the risk of submitting incorrect or incomplete declarations of usage to exchanges and vendors, which may result in hefty penalty fees if detected during an audit. On the other hand, inefficiency is hidden, so that often more market data is subscribed to than is actually used – with a corresponding impact on the cost side.
By analyzing the market data flows into and between applications as well as their usage within the financial institution, the Market Data Map business solution can generate the following benefits.
Realization of the benefits requires a modicum of organized market data management with enough assertiveness to drive such a cross-departmental issue.