May 10, 2021

Overview

The client, a leading, privately held investment management firm, serving clients from London, Hong Kong, and US offices, engaged Cutter Associates to review its market data environment, including the following:

  • Identifying its full market data usage.
  • Providing guidance on keeping costs under control.
  • Reviewing how the firm tracks and administers market data contracts and usage.
  • Educating its user base on costs and approaches for market data.

Cutter Solution

Cutter worked with the market data administration team as well as the client’s front office and product teams to achieve the following:

  • Identify all areas where the management firm was buying external data.
  • Analyze data flows and identify all end consumers and uses of the market data and review compliance with market data contracts. (The firm reviewed the market data administration practices and its market data contracts.)
  • Review data governance efforts for market data and how costs were allocated across business units.
  • Conduct a study of market data practices at several peer firms to identify common practices and strategies for reducing market data spend.
  • Identify specific market data costs that were not consistent with the benefits being achieved with the data.
  • Identify areas where the client could streamline its handling of market data and improve access to the information.
  • Identify a need to rapidly bring in new types of data for investment teams and provide insight into the organization and tools needed to deliver this capability.
  • Provide insight into improvements that our client could make in its market data contract processes to slow the rate of cost increases.

Our client used the insights from Cutter to reevaluate the way it looked at purchased data and reorganized the market data administration function under the data governance organization. This allowed for oversight of more types of data, as well as alignment with data ownership models, and more accurate monitoring of market data usage and costs.

The client was able to streamline the ingestion of several types of data to improve the process and reduce costs.

Our client is slowly reducing its market data spend by rationalizing usage across groups and eliminating areas where data was redundantly sourced, as well as leveraging tools built in one part of the organization to rapidly assess new data sources.