Harnessing the next wave of reference data

Harnessing the next wave of reference data

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Having been responsible for many significant developments across the reference data market over the last 25 years, Euromoney TRADEDATA is making a change of its own by rebranding as ETD. But its ‘data by design’ ethos remains unaltered.

Since 1997, ETD has transformed the way trading firms of all sizes access and leverage mission-critical information covering everything from exchange fees, position limits and market data vendor symbology to the latest regulatory reporting requirements.

Over the past few years, it has expanded its provision of reference data services to market participants of all sizes through leading-edge personal workflow products and a well-established partner programme.

Customised solution

This ability to offer every customer a customised solution is important for all institutions which have different technology configurations and trading systems – rather than trying to fit its data into their systems, ETD offers a flexible approach based on a quarter of a century of data engineering expertise and market knowledge.

“We are not bound by any sort of institutionalised approach to asset class coverage - we are highly specialised,” says Mark Woolfenden, managing director. “The success of this approach is reflected in the fact that our clients keep renewing their business with us.”

One of the consequences of how the reference data market is structured is that once the company solves a specific challenge for one client, it is effectively resolving it for everybody else because of how data is published, aggregated and used in every client’s search systems.

This demonstrates ETD’s commitment to the market and underlines its position as an innovator. For example, it was the first provider to produce an exchange fees database.

“We also had a position limit service well before any of our competitors,” adds Woolfenden. “However, our flagship innovation is Xymbology, which allow orders from client platforms to be instantly mapped into clearing and settlement systems.”

Open positions can be dynamically tracked for clients by using the same symbology to retrieve real-time prices from market data connections and produce reports with enhanced attribute information.

Prior to this, sell-side firms trying to win brokerage business from buy-side clients couldn't service it if these clients were operating on a platform that the sell-side didn't support, so clients were restricted to working with those sell-side providers who could work with their choice of trading solution.

“The first time Xymbology was implemented by one of our sponsoring clients, they won four new multi-million pound brokerage service contracts within the first six months,” says Woolfenden.

Data focus

Reference data is a highly competitive market where technology vendors often offer both data and software services. But Woolfenden does not believe technology vendors are best placed to provide the necessary quality, depth and breadth of data solutions.

“We recognised very early that our business is curating complex and global datasets, and making them fit for purpose in machine-readable, standardised formats that can be used in as many systems and solutions as the client requires,” he says.

However, ETD also recognises that the ability for data to flow through these systems is the glue that holds them together. Therefore, it has created partnerships with a number of technology and platform vendors to leverage their complementary skills in data management and develop the technology to handle that data.

“We offer connectivity to all the major technology vendor solutions, which means clients can be assured that the data being used in their solution is that in most widespread use across the industry.”

Market reach

ETD works with nine of the 10 tier one investment banks, but it also has many tier two investment bank clients where its data is in constant use. Just over a year ago it commissioned an extensive market survey of tier two and tier three firms which showed that reference data remains a challenging issue across the board.

As well as providing affordable access to the subsets of qualitative data that are in the scope of interest for firms trading only selected instruments, ETD clients also have access to 25 years’ worth of historical trading data, which can be overlaid with a number of different economic or other trading trends to help clients determine the likely efficacy of new trading strategies and products.

When asked how the company’s exchange and contracts coverage compares to that of other providers, Woolfenden points out that it covers at least as many - and in most cases more - than other data service providers because it has invested in data management systems and solutions for capturing data and processing.

“Our approach has always been that if there is a viable derivatives market we will cover it,” he says. “The threshold at which we can cover a market in cost terms is lower than other vendors with higher fixed overheads.”

Workflow development 

Looking ahead, Woolfenden says he is excited by the potential of personal workflow products, explaining that this technology is already challenging the way data is surfaced by those who use it and enabling a more focused approach.

“The technology is available to put reference data into a personal workflow for clients that don't necessarily want to subscribe to us as a data vendor,” he explains. “These firms want a functional application that specifically delivers trading, portfolio management, reporting, customer service or whatever else they want from it.”

ETD recently completed an integration project with Symphony, a major communications platform that allows secure passage of dialogue and data between a bank’s different entities and between different financial institutions.

The pandemic accelerated demand for workflow solutions and ETD sees this as very complementary to the direction of travel that it has enjoyed with the bulk delivery of universal data sets to tier one clients.

“Our ability to sell into second and third tier firms will be further enhanced by the availability of workflow products at a low entry level,” concludes Woolfenden.

To find out more go to www.euromoneytradedata.com 

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