The market data study – carried out from April to July 2024 – spans 67 respondents at asset managers, wealth managers and broker dealers in the U.S., U.K., Europe, and Asia. First launched in 2023, this is the second in a series designed to better understand the trends and challenges of consuming market data.
Adoption of cloud technology has increased significantly, with half of respondents now opting to receive data across both public and private cloud hosting applications, compared to a 30% adoption rate last year. The application of other advanced technologies – including API delivery formats – is also set to become more widespread, with 70% of institutions expecting a greater shift to APIs over the next three to five years. Looking ahead, investors anticipate using emerging technologies at surprisingly robust levels, with three quarters of respondents citing Artificial Intelligence (AI)/Machine Learning (ML) as the lead factor to enhance market data delivery and consumption.
Compared to last year, this surge in interest can be attributed to real-time data becoming a competitive differentiator for market participants. While most respondents rely on multiple frequencies of data, including delayed, historical, and end-of-day, greater market demand for real-time information supports the adoption of more advanced technologies.
Unsurprisingly, spending on market data is projected to rise for the second year running, with growing budgets being allocated to equities, index, fixed-income, and ESG data sets. For some market participants, these increases could exceed 16%. However, study participants continue to prioritize data quality, accuracy and reliability over all other considerations when deciding on market data types, frequency and vendor, building on the trend that emerged in 2023.
Commenting on the findings, Roy Kirby, Head of Core Products, Financial Information, SIX said: “New and emerging technologies are a transformative force. While the benefits are well known, market data delivery and access methods are shifting fast year on year. With a wide number and constantly evolving set of use-cases for market data, one thing is clear: access to quality, timely data is crucial. None of the benefits can be realized without a solid data foundation to build on – and this is where cloud and APIs will add greater value to market participants, and ultimately drive forward growth.”
“High-quality data is paramount to any type of data use, no matter how transformative it is. The use of generative AI by market data users is becoming increasingly apparent – especially for creating and supporting investment decision-making. This development is underscored by the shift toward higher frequencies of data and more efficient data delivery,” added David Easthope, Senior Analyst for Coalition Greenwich Market Structure & Technology and co-author of the paper.
Read the full report.