Financial services institutions (FSIs) are under much pressure to ensure they have appropriate infrastructures in place, to handle throughput of rising market data volumes. according to a new report by independent market analyst Datamonitor.
Spending by European and US hedge fund and fund management firms (buy side firms) on front office market data infrastructure is set to reach US$484 million by 2009. That by investment banks (sell side firms) will peak at US$1.9 billion.
“Market data has always been a fundamental element within capital and financial markets”, say Amit Shah, financial services technology analyst with Datamonitor and author of the study. “However, upcoming regulations such as Regulation National Market System and Markets in Financial Instruments Directive (MiFID), will place immense pressures for accuracy and transparency. This has raised the significance of market data and therefore brought this issue back on the strategic agenda.”
He adds: “As automated trading becomes increasingly cross-asset, so too must storage and analytic platforms to support cross-asset, next generation trading. Although some within the industry would argue this is straightforward, it is a complex process to provide these high performance tools and meet the challenges of integrating the data.”