Celent Communications have published a study of the market in equity data. In a new report , entitled “Achieving Market Data Integrity: A Critical Mission,” the consultancy looks at the processes involved in achieving data integrity and identifying the ultimate benefits associated with IT. It summarizes interviews with market data experts, institutional traders, and leading money managers and highlights Iverson Financial Systems equity index data product.
“Equity market data is used daily by a variety of institutional traders from proprietary traders at global securities firms, hedge fund traders and institutional money managers ,” explains Celent. ” Several forces have made market data integrity a higher priority for leading institutional trading and money management firms. First, the volume of data flowing through trading desks and programs has grown tremendously over the past decade. Second, the stakes have risen because trading opportunities are smaller and shorter-lived. Larger positions and speed are required to generate satisfactory returns. Third, the goal of straight-through processing mandates data integrity. “
Celent Communications found that , while ensuring equity data integrity is a relatively expensive undertaking– it cost s over a million dollars for equity index data feeds overall–it is an extremely rewarding one, generating over five million dollars in annual revenues and loss reductions. “Given global trading volumes, complexities, and market vicissitudes, market data integrity is no longer merely nice to have-it is a `must-have,’ says Celent.
According to Alenka Grealish, senior analyst at Celent, “Despite technological advances, insufficient data-scrubbing by the sources, compounded by the continuing need to manually enter certain data (e.g., corporate actions), mean that errors and omissions continue to occur on a daily basis across both developed and emerging markets.” Sang Lee, senior analyst and co-author adds, “As institutional traders’ quest to beat the market and ferret out market inefficiencies becomes more challenging, the role of equity data integrity in their trading strategies and model building has become paramount.”