Max Bowie: Seeing the Big Picture Depends on Automating the Small Stuff

Automation isn’t a new concept in the capital markets: Trading algorithms have replaced human trades in high-volume, low-value vanilla trading activity; commoditized functions such as payment messages or corporate actions processing have replaced manual intervention and fax messages with electronic messages and protocols; and automated platforms are now monitoring the health of networks and servers to ensure uptime and measure trading algorithm performance to improve those algorithms using machine-learning techniques.

And behind the scenes, there are other important forms of automation that feed into these higher-profile examples, such as automating some of the painstaking tasks associated with market data management and systems administration.

For example, Waters’ stablemate Inside Market Data has recently profiled new developments by Axon Financial Systems and West Highland Support Services that automate the processes of accurately pricing requests for datasets, and for managing the process of implementing changes and updates from vendors in entitlement systems.

Instant Determination

Axon’s new “What If” add-on module to its Policies, Explanations and Reporting (Pear) repository of exchange fees and policies allows firms’ market data departments to instantly determine how much it will cost to implement datasets and markets, based on factors such as the number of end-user accesses required, the number of exchanges from which data is needed, and what the license for each dataset allows. This potentially saves a huge amount of time spent manually looking up and trawling through each exchange policy to find relevant information, then calculating the numbers and costs.

“Data updates had become a monumental task for people, and it was screaming for automation.” Steven Roe, West Highland Support Services

Meanwhile, West Highland’s Data Notification Manager distills the spreadsheets of change notifications—such as fee changes, and re-naming or reconstitution of datasets—from vendors into a file of upcoming notices relevant only to each client firm based on the data used by their staff. “There can be hundreds of changes, sometimes impacting thousands of items. This had become a monumental task for people, and it was screaming for automation,” says West Highland CEO Steven Roe.

Similarly crying out for automation is the process of managing software rollouts and updates to ensure consistency across a firm’s operations and reduce risks associated with running different and inconsistent versions of the same software, according to DynamicIQ co-founder Thierry Hue, who set up the company after experiencing issues with updates and version management in his prior roles running client connectivity and quality assurance at tier-one banks. The vendor has recently begun marketing its Application Modeller tool to potential clients among financial institutions, vendors and exchanges, and is hoping to curry favor with potential clients seeking to automate time-consuming and tedious but risk-inherent processes.

Human Error

Think how automation has allowed firms to shift human traders to focus on higher-value tasks, such as more valuable and complex trades, and client interaction. Data professionals, too—when assured that these can be safely offloaded to automated processes—can not only reduce the risk of human error associated with manual but menial tasks, but can also focus on higher-value, strategic tasks around market data, such as identifying new datasets and suppliers that can deliver alpha and add value and top-line growth, or focusing more on strategic vendor comparison, bake-offs and negotiations that also impact the bottom line.

After all, the value of an experienced data professional lies in their knowledge and experience of vendors, their data, and its uses and limitations, not in their ability to manage software upgrades.