Every South African institution that plays in wealth and investment management depends heavily on accurate, real-time market and trading data to drive its business.
As data providers’ commercial models and licensing agreements evolve, the challenge for South African institutions is to tame the costs of third-party data and ensure compliance with licensing agreements.
One step organisations in South African capital markets can look at to reduce data usage costs, is to consolidate contracts for market and reference data at a group level rather than sourcing it through multiple business units. This will improve data governance, provide better insight into data requirements and usage, and offer metrics about the efficiency and value the company is getting from its data vendors.
Wealth and investment management organisations are now faced with more choice in acquiring data whilst data vendors are faced with more competition, as the barriers to entry have dropped and new entrants to the vending space like exchanges, extend the options for users.
Whilst historically access to information or analysis has most often been commercialised on a subscription basis, either per user or per client or enterprise, data licensing models are evolving along with purchasing packaging options.
In and amongst this we see users experimenting with ways to reduce costs or to exert downward pressure on pricing. New technologies such as artificial intelligence will influence the amount of market data required and software companies offering a market data cost analysis layer to clients are providing greater transparency on spend and enabling better spend management.
The data industry is evolving in interesting ways, worth watching this space.
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