Data: Facilitating Markets, Fueling SIX

According to market research firm IDC, in the next five years humankind will generate twice as much data as has been produced since the dawn of digital storage. Data permeates our everyday lives. Smartphones, sensors, streaming: Data is behind every service that we use. It eases workflows, meets needs, and provides information. And thanks to technological advancements, it is available in virtually any place at any time.

The ubiquity of data and new technological possibilities are drivers of innovation – including the financial information business. For example, artificial intelligence and cloud technologies make it possible to analyze huge volumes of data. Compared to simply obtaining the raw data, this creates added value for financial market players.

This can be illustrated using the example of the trend toward sustainable investments. Investors are increasingly inquiring about the ecological, social, and ethical orientation of investments or portfolios. Reliable information on ESG (environmental, social, and governance) criteria will soon be indispensable not only for advisory services, but also for the risk management and compliance of financial institutions. Because, while end customers increasingly need to factor ESG-considerations into their investment decisions, sustainability criteria and transparency provisions are being tightened through increased regulation. SIX aims to support its clients in this challenge by bringing all relevant data into a seamless distribution, analytics, and insights solutions offering.

However, regarding financial information as an isolated growth market would be selling the topic short. Data has always been a catalyst for financial markets, supporting transparency and market participants’ decision making. With the ability to extract insights from big data using technology, financial information now has the potential to link communities even beyond financial markets. It increases transparency between different sectors, therewith adding to the efficiency of processes and even creating new business opportunities.

For example, standardized programming interfaces, known as APIs, provide new participants with the opportunity to access traditional areas of banking. Open Wealth APIs have been live on bLink, the Open Banking platform from SIX, since 2021. Portfolio management systems, via which external wealth managers obtain their services, can easily and securely log in to them and integrate a bank’s portfolio data directly into their tools. Such use cases are just the beginning of an evolving API world in which the value chain of banks is increasingly broken down based on the data available.

Data is also the catalyst for growth in the flourishing market for exchange-traded funds (ETFs). In contrast to the booming US market, the European market remains very fragmented. There is a lack of structure and efficiency. Having the right data in the right place can resolve this shortcoming. With the 2021 acquisition of Ultumus, the international index and ETF data specialist, SIX secured access to this very data – as Ultumus covers 95% of the ETF market. Combined with the value chain offered by SIX – exchange, post-trade, and reference data all under one roof – the company now has a unique selling proposition in the European ETF market.

All these examples illustrate how data is becoming a driver for growth along the entire value chain of SIX.