Opening Cross: Adversity Breeds Innovation in the Market Data Wars
A week ago, I was cruising around the Mediterranean, my thoughts far from market data. A fascinating region with a broad range of cultures, the Med was the target for many would-be empires throughout the ages, from North Africa's invading Moors to Caesar's Roman Empire. And like competition among empire-builders in the financial markets today, conflict was the driving force behind innovation.
For example, in more recent history, British troops on Gibraltar withstood sieges from the Spanish army by digging tunnels and gun emplacements into the massive Rock of Gibraltar, providing protection and a vantage point from which to fire on their enemy, and invented a cannon that could tilt downwards to fire from an elevated position, as well as - in a bid to do the most damage with as little of their depleted arsenal as possible - exploding shells that were the precursor to shrapnel bombs.
Today, the battlegrounds are financial markets, and trading firms enlist armies of developers to invent the weapons with which they wage war against their rivals. And while the economy of the past few years has proved challenging for many firms, with tighter budgets restricting their ability to throw money at big projects, this has not stifled firms' innovative spirit. If, as they say, necessity is the mother of invention, then adversity is the spawning ground of innovation, forcing people to find new solutions to competitive pressures.
In some cases, this means looking at how a firm does business and changing processes if they can be done better. For example, London-based derivatives broker and financial spread-betting firm City Index has outsourced its market data usage reporting and administration function to consultancy Ballintrae to help manage the complex issues surrounding derived data licensing. The benefit of this change is twofold: First, City Index can utilize specialists with experience of many similar cases and a database of validated exchange policy information and interpretations, and second, the firm can redeploy the IT staff that previously performed the function in-house to focus on pursuing technology innovation around its trading platforms and supporting tools.
In other cases, it means using alternative services where suitable, such as Nasdaq's Basic feed of best-bid-and-offer and last sale data, which data display vendor Quodd is preparing to roll out after current and prospective clients alike expressed interest in the cut-price alternative to a full consolidated US equity time-and-sales feed.
It also means that firms are more willing to look at new technologies, some of which-such as hardware acceleration-have gained mainstream acceptance despite the downturn. After a tough 2009, "People are doing cool things again," says Barry Thompson, chief technology officer at hardware messaging infrastructure vendor Tervela. One player taking advantage of this is Celoxica, a UK-based provider of hardware-accelerated feed handlers, which has built up a client base and pipeline in the US, and is now making a direct play in the US market with a dedicated office to boost its local support, responding to what it perceives to be optimistic signs in the market and demonstrating the importance of another battlefield rule - "improvise, adapt and overcome."
Nowhere are these principles more important than in a competitive market such as Chicago, where we host our second Inside Market Data Chicago conference this Tuesday, Sept. 14, with a full day of panel discussions addressing everything from end-user data management strategies to low-latency issues and the evolving role of exchanges and trading venues, designed to help hone your warcraft and give you the tools to "unleash hell" in the battle for alpha.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
Asset manager Saratoga uses AI to accelerate Ridgeline rollout
The tech provider’s AI assistant helps clients summarize research, client interactions, report generation, as well as interact with the Ridgeline platform.
LSEG rolls out AI-driven collaboration tool, preps Excel tie-in
Nej D’Jelal tells WatersTechnology that the rollout took longer than expected, but more is to come in 2025.
The Waters Cooler: ’Tis the Season!
Everyone is burned out and tired and wants to just chillax in the warm watching some Securities and Exchange Commission videos on YouTube. No? Just me?
It’s just semantics: The web standard that could replace the identifiers you love to hate
Data ontologists say that the IRI, a cousin of the humble URL, could put the various wars over identity resolution to bed—for good.
T. Rowe Price’s Tasitsiomi on the pitfalls of data and the allures of AI
The asset manager’s head of AI and investments data science gets candid on the hype around generative AI and data transparency.
As vulnerability patching gets overwhelming, it’s no-code’s time to shine
Waters Wrap: A large US bank is going all in on a no-code provider in an effort to move away from its Java stack. The bank’s CIO tells Anthony they expect more CIOs to follow this dev movement.
J&J debuts AI data contracts management tool
J&J’s new GARD service will use AI to help data pros query data contracts and license agreements.
An AI-first approach to model risk management
Firms must define their AI risk appetite before trying to manage or model it, says Christophe Rougeaux