Audits becoming a regular feature on the calendar for exchanges and data providers, financial market players can often find themselves in an endless cycle of audit preparation and post-audit clean-up. In fact, it’s fair to say that the audit announcement is the number one cause of stress in the market data community:
- Demand Management: Streamlined request management processes with approval signoff and efficient delivery.
- Inventory Management: Standard categorisation for vendors, services and contracts with inputs including HR and entitlements.
- Financial Management: Review and reconciliation through inventory management tools with exception handling and escalation services.
- Vendor Management: Order, contract management and maintenance with advisory on pricing and negotiations.
- Cost Reporting: Full transparency of reporting for management information.
- Business Analysis: Strategic vendor analysis, advisory and internal data auditing.
Non-compliance of market data within applications is a material risk within the industry, from both a financial and reputational perspective. Recently, Nasdaq’s Q3 results quoted a 6% increase in Data Products revenues due to higher audit collections.
Once the auditors, or the audit consultants working on behalf of the exchanges, arrive on site, the market data team needs to be able to show exactly what data is entitled. It's worth noting that the audit covers a historical period, and shows exactly what data is entitled. It's worth noting that the audit covers a historical period, often up to three previous years, and banks are contractually obliged to maintain complete records. These records cover a range of documentation and may include entitlement reports, details on data consumption within applications and systems, and vendor declarations.
The bank is expected to be able to prove that it is complying with the exchange contracts, including knowing what data is allowed to be used where, by whom, and keeping abreast of what data is allowed to be used where, by whom, and keeping abreast of the paperwork and policy changes for all vendors and exchanges.
This challenge is compounded by many enterprises having multiple versions of contracts with the same vendor covering various datasets, departments, applications and desktops. With the added audit demand, time away from the day job impacts many areas of the firm.
CJC can provide varying levels of engagement, from an individual exchange or vendor within a single app to the full-blown 'once-and-for-all' analysis encompassing all data providers and platforms at the same time. Packaged as a ‘mock audit’ service, this short project is able to provide clarity on the risk that a bank may have prior to a real exchange or vendor audit.
When this is established, CJC compares the findings against all the contracts held by the client for each data provider or underlying exchange, to identify instances where the data usage is not covered by the paperwork. After this analysis, CJC recommends steps to aid exchange, to identify instances where the data usage is not covered by the paperwork. After this analysis, CJC recommends steps to aid compliance going forward, including quantifying the potential financial liability covering the audit period in scope.
Once we've located the data, analysed its usage and married this against the paperwork, we can recommend which exchange products may best suit the client's needs.
We analyse permissioning by vendor and platform, clarifying exactly how and where data is being consumed. Leveraging our strong relationships with the exchanges, we can recommend which data products best match client requirements.
"In a mock audit, we conduct a comprehensive review of the client's market data ecosystem tying together the usage, invoicing, contractual relationships, and entitlement controls to help ensure compliance at all levels. The client is provided with a quantitative risk assessment, guidance on targeting high-risk areas, as well as ways to optimise spending."
Janet Mail, Global Head of Commercial Management Services at CJC.
CJC Commercial Management: An Overview
CJC'S Commercial Management division delivers managed services and discrete consultancy engagements to global clients in the financial services sector.
Underpinned by practical experience within the vendor, business and exchange environment, the team provides expert and impartial advice, delivering a best practice, cost-effective managed service alternative to in-house commercial management. Our commercial expertise enables significant cost savings on data services and technology infrastructure, while our supplier intelligence facilitates better-informed product and service decisions. We provide support as needed from a one-off review project such as a ‘mock audit’, to an augmentation of an in-house team, through to a fully managed service and deliver end-to-end, best practice managed solutions.
A comprehensive capability matrix enables management right across the financial data spectrum that embraces six core pillars:
Streamlined request management processes with approval signoff and efficient delivery.
Standard categorisation for vendors, services and contracts with inputs including HR and entitlements.
Review and reconciliation through inventory management tools with exception handling and escalation services.
Order, contract management and maintenance with advisory on pricing and negotiations.
full transparency of reporting for management information.
Strategic vendor analysis, advisory and internal data auditing.
CJC is the leading market data technology consultancy and service provider for global financial markets. CJC provides multi-award-winning consultancy, managed services, cloud solutions, observability, and professional commercial management services for mission-critical market data systems. CJC is ISO 27001 certified, enabling CJC’s partners the freedom to focus on their core business.
Established in 1999, we provide specialist consulting, professional services and products to the global financial services sector. Our solutions leverage cloud technology to optimise and manage real-time data distribution platforms, as well as enhance the overall commercial management of market data.
As a vendor-neutral partner, we can help you put in place tailored technology solutions that are right for your business, and then manage your data infrastructure, freeing you to focus on your core business.
With a global reach and offices in London, New York, Hong Kong and Singapore, we'd be delighted to learn of the challenges you face around data and how we may be able to help.