Yes, there can be too much of a good thing.
Data is a great example. Having data is a good thing. Having great data is a better thing. Market data, information about the price and trade activity of financial instruments is an excellent example. Traders and investors derive great value from being able to know the latest price and historical trends for instruments such as equities, fixed-income products, derivatives, and currencies. More and more businesses are using market data often to help prepare them for regulatory requirements.
In the market data industry, there are many vendors and exchange vendors who provide data to banks, asset managers, and other financial organizations that are consuming market response data feeds. Many different products and services delivering many different types of data from many sources. Distribution vendors deliver their own content and also redistribute data from exchanges as well.
And to add to the complexity, all these data from all these sources are constantly changing. There are changes to the coding or the reference coding, the naming, the content, the pricing of all these instruments. Not only is the price of access to many data feeds constantly changing, but so are the policies. While you may have originally signed an agreement allowing you to use the data is in specific ways, manipulate it, repackage for sale to others. Suddenly, the stock exchange responsible for that data says you can no longer do those things anymore. Continuing to do that could put you into breach of contract and liable for fines ranging into the millions of dollars.
Providers of market data retain the right to verify, at any time, how their data is being used. You could try attributing your failure to comply to simply not knowing about the policy change. Make that mistake, however, and the market data provider will instantly show you the notification they sent out.
Lost in the Noise
This doesn’t immediately condemn you for non-compliance either. With so many data distributors, aggregators, and others providing the data, and so many changes taking place constantly, it is all too easy for any of the millions of market data change notifications to have escaped your notice through no fault of your own. There’s simply too much going on, too many changes taking place constantly for you to ever hope to keep track of it all.
Making it worse are the tools currently in use in an attempt to keep track of it all, mainly manual tools and spreadsheets. With this much volume, velocity, and variation those tools can never hope to keep up. The challenge to market data managers? How do you keep up with all the changes to all the data feeds and other instruments to make sure you’re paying for them properly, using them appropriately, and avoiding running afoul of the vendors and the government agencies that protect them.
Vendor Data Notification of Changes
Whenever any vendor is intending to change services in some way by or at a specific date, they are required to issue a vendor data notification to tell their customers about this upcoming change. Where they foresee a change in the price of a given product or service or a change in the policy or a change in the way it's delivered or change in the code or the unique reference code, it becomes their duty to produce a data notification record detailing what that changes entails.
This may come to market data managers and users in the form of emails, spreadsheet files, comma-separated variable (.csv) files, PDF files, or more recently via application program interfaces (API). They are typically categorized to denote the type of change that is scheduled to occur on a defined date referred to as the effective date, but are not customer-specific, meaning that everyone receives all notifications creating tremendous volumes of unwanted noise and irrelevant notifications that all market data managers must sift through, often repeatedly.
Manual management of all this is time-consuming, and extremely prone to error. With this huge amount of information, it makes it very difficult for customers to understand what changes are coming through, how it's going to affect them, and what they need to do about it. Any given individual at, for example, a bank will have a number of products or services in use. When change notifications come through, they need to quickly know which of the products they use will be affected by it. Every time a vendor data notification is received, there’s a great deal of work to be done to match it to each customer’s environment.
In any given organization, its likely they’re using hundreds or maybe thousands of product lines out of a catalog of several million. The vendor could sends notifications about all of them. For each, the customer must interpret each email, each line item, identify which product and product code they're talking about, then have go into their own system to figure out which product codes they are talking about that are among the product codes they are subscribing to. Then match it up, identify how many users within their organization have, or are entitled to, or have permissions to that particular service feed, what they're paying, and what the impact would be.
In the event of a product moving, for example, going from free to fee-base, the market data manager must now go and find out if those users actually want to keep this service now that they've got to pay for it, or if their manager wants them to pay for it. Then have to act upon that and then go poll these users to see if they need it or not.
A Solution Emerges
Recognizing the accelerating growth of this challenge, Calero has added s a fully integrated module within our cloud hosted Market Data Manager (MDM) system that utilizes innovative automated technology to onboard, structure, categorize, allocate and action each Vendor Data notification record, providing an efficient way to sift through the data notification ‘noise’ and clearly identify what is important for your business.
This module comprehensively assesses Full Impact Analysis on affected users, services, ID’s, applications, feeds and contracts linking each data notification with related inventory items within MDM. It also provides immediate analysis of the cost impact of upcoming price changing services, with auto action capabilities to certify users or managers. A rich and detailed Dashboard Reporting System tracks next effective data notifications, cost and change analysis, with the ability to share and email out on regular schedules.
Operational Advantages of the Calero Vendor Data Notification Module
Designed with process simplification for the user in mind, Data Notifications are auto loaded directly into MDM system to map to related inventory data which means no loading of additional inventory or DACS/Vendor inventory file data is required.
Unlike other stand-alone systems, this is a fully integrated solution for immediate impact analysis on each Data Notification record on affected related inventory, including users, services, IDs, applications, contracts, and more. It delivers immediate cost impact analysis on each Data Notification record, detailing how much each notification will affect their company based upon their current MDM inventory.
Usage data loaded into MDM provides “RAG” status on each affected related inventory (Red = User using affected Service, Amber = Low usage from User, Green = No usage) and actions are rapidly commenced within the MDM environment on affected related inventory, including initiate Certification campaign, change pricing, raise Application Compliance surveys, highlight affected Applications from Instrument Code changes. This enables the MDM to always be in proactive mode.
Only the Beginning
As the use of market data continues to expand, anticipate a continuing series of advances and improvements in the tools and platforms Calero provides. For more information about Vendor Data Management, contact your Calero Account Manager, or Alistair Brooker, VP/GM of Market Data at Calero.