Market data is often the third largest expense for financial firms and market data costs continue to rise. This makes effective market data spend management and the tools for tracking and controlling market data expenditure crucial. In an earlier article, we outlined 4 steps to control market data spend and the right management tool for your business facilitates this process. Combined with the right expertise, as a recent case study demonstrates, the benefits of a market data spend management tool that fits your business needs cannot be overstated.

Your firm likely already has an existing spend management tool or an Excel spreadsheet for administering market data. However, as business needs evolve, market data administrative operations must keep pace to stop data costs from spiralling out of control – something a recent case study (2023:4) illustrates. This article explores why firms should consider alternative spend management tools and how to find the right one for your business needs.

Why Consider Alternative Spend Management Tools?

Speaking with Catherine Ottway, Commercial Management Team Lead at CJC, she explained financial firms had multiple reasons why they may consider changing their existing spend management tools. Some of the common reasons for change include:

1. Cost Efficiency: Market data tools can be quite expensive, and organisations may find more cost-effective alternatives that better fit their budget.
2. Business Growth: As firms grow, their market data operational needs change. Existing spend management tools may no longer be appropriate for the increased complexity and volume of data.
3. End-of-Life Systems: Some market data spend management tools may have reached their end-of-life, necessitating a transition to alternative systems. Also, for in-house solutions, knowledgeable staff leaving prompt a move to a more sustainable option.
4. Better Workflow Management: A dedicated spend management tool may centralise and streamline workflows. Also, for in-house solutions, an established industry tool may be a more sustainable option to avoid loss of knowledge when staff moves onto other roles. 

Catherine emphasised that finding the right spend management tool was essential to getting accurate and reliable data for informed decision-making and identifying expensive data inventory gaps or costly inconsistencies.

Finding The Right Spend Management Tool

As the number of available spend management tools and their features increases, choosing a new market data administration platform may seem daunting, each will have its strengths and weaknesses. Committing to any migration without fully understanding what these are for your chosen tool will undoubtedly cause future friction or even scrapping the tool altogether.

To achieve the best results and avoid such scenarios, firms should engage experienced market data experts actively engaging with multiple industry tools to migrate their complex market data estates. Of course, financial firms may attempt to scope and shortlist the available tools themselves. However, without deep usage experience, discovering a tool’s weaknesses is almost impossible without a costly trial and error process.

A Successful Market Data Migration

Migrating market data into a spend management tool is an opportunity to identify underlying challenges like data spending, or licensing inconsistencies and, the value of having people with the correct skills should not be underestimated. Catherine explains that market data migrations are not simple “lift-and-shift” or “copy-and-paste” exercises, with multiple underlying processes involved, which include validating and cleansing data between various tool providers to enhance or maintain a market data inventory’s quality. She notes that this “directly impacts financial reporting and strategic planning.”

Asked to elaborate on what the common denominators are for a successful market data migration, Catherine listed 4 key considerations:

• Maintaining Workflow Integrity – A successful migration involves maintaining existing workflows. CJC’s Commercial Management team will map out your current processes to ensure preservation in the new system, including understanding how data flows from suppliers to internal applications and reporting outputs. She emphasised the team’s skill with import-export APIs and reporting for accurate process replication.
• Global Perspectives on Market Data Management – The nuances of managing market data can vary regionally and between industries. With a global presence, CJC’s team adopts a flexible approach to address the differences and manage projects globally. The collaborative environment encourages best practices to be shared, fostering continuous improvement and providing diverse insights into market data management practices.
• Forward-Looking Market Data Spend Management – Staying informed about emerging industry solutions or technologies, like artificial intelligence and machine learning, can significantly enhance data analysis and reporting capabilities. As the market evolves, firms must remain open to innovation for efficiencies and better market data expenditure management opportunities.
• Ongoing Support and Improvement – To maintain the quality of your market data estate after migration, the team provides detailed process workflows and recommended improvements and efficiencies tailored to your business needs. The team is also available for ongoing managed services, hitting the ground running to ensure continuous optimal market data spend management.

Navigating the complexities of market data spend management and tool migration requires a thoughtful and informed approach. Catherine summarised that firms could manage their market data spending effectively by focusing on data integrity, maintaining workflow efficiency, and staying abreast of industry trends.

How CJC Can Help

CJC’s vendor-agnostic Commercial Management team offers extensive expertise to facilitate smooth migrations between market data spend management tools. This enables you to receive impartial and bespoke guidance on various systems like MDSL, Optimize Spend, or INFOMATCH, as well as in-house solutions and Excel. Other benefits of partnering with CJC include: 

• Vendor-agnostic objectivity.
• Multi-system expertise to ensure success.
• Decades of combined market data management experience.
• Workflow management familiarity, including:
  • Contract management.
  • Vendor management.
  • Finance reporting.
  • Market data administration.
• Strong market data migration track record.
• Team backgrounds in database suppliers, tier-one banks, and brokerages.