The New Data Marketplaces are Modernizing the Market Data Shopping Experience
As market data has become the most important asset to financial institutions, new marketplaces are transforming the way the financial industry consumes data. These supermarkets, emerging largely in the past two years, offer data for prices, entity relationships, geolocation, weather, shipping, and market sentiment. While certainly not a new concept, the data marketplaces are seeing greater adoption now because data consumers recognize the value of rationalizing their vendor relationships, while the data providers can take advantage of their ability to increase product exposure and distribution to targeted clients.
The marketplaces, or exchanges, serve as a web-based services where financial institutions discover and acquire data from multiple providers through a single site, without the need to subscribe to a long-term contract from any single provider. They differ from most other means of selling of data because they offer customers the flexibility to buy as little as one data set, a la carte, without committing to long-term contracts with their providers.
Because of this, customers can search for a specific data set on the marketplace site, find the source of that data, and purchase it directly from the marketplace. That’s how we want to do business. It’s why we shop for autos on Carvana instead of driving from Ford dealer to Nissan dealer to BMW dealer on a Saturday afternoon. Shopping in this way enables us to make choices that are not limited by existing contracts or lack of clients’ access to smaller providers.
Hosts of these data exchanges have tapped into the customers’ needs and built processes that align with the preference for an agile shopping experience, moving to a model where professionals can pick and choose data from any provider at any time. They have recognized the value of aggregating data from multiple sources onto a single platform, forming data exchanges as public marketplaces for financial institutions that value many different sources of data, but prefer fewer encumbrances and vendor relationships.
Both well-established providers of traditional market data and newer sellers of alternative data make their offerings available on the marketplace to gain exposure to a defined user segment or target market that they may not typically be open to, while the data contributed the marketplaces should be additive to, rather than redundant with, existing data in that market.
While so many of our personal shopping experiences embrace sites that aggregate multiple vendors’ offerings, the broad adoption of data marketplaces is still in its early stages—beginning in earnest in 2018. We expect the concept to steadily gain traction as more data sets are made available on these platforms, simplifying the buying process for financial institutions. Burton-Taylor’s new report “Financial Data Supermarkets” presents the reasons behind the increasing popularity of these marketplaces and the importance of this new distribution channel for both the data providers and data consumers.
Robert Iati is the Director of Burton-Taylor’s Market Data Research and Strategic Consulting businesses. Burton-Taylor offers unique insight into the Global Market Data Industry. Subscribers to Burton-Taylor’s Market Data research service get access to our library of content including our annual Market Data Benchmark as well as reports covering industry M&A activity and special reports focusing on specific segments within the industry. Visit our newly redesigned website at https://burton-taylor.com/ and contact firstname.lastname@example.org for more information on our subscription packages.