We’re in A New Era of Market Data Sharing

At a Glance

  • Survey results reveal preferences for cloud distribution, consolidating data sources
  • CME Group launches data sharing agreement with Johannesburg Stock Exchange

In almost every industry today, effective decision-making depends on having the right data. You can see the evidence in the race to disseminate business analytics. Google, Salesforce and other major firms are investing heavily in getting customers new, reliable data faster and more efficiently.

The needs are especially present in financial services. Investors, researchers and risk managers are looking for market data delivered as quickly as possible – everything from futures prices to satellite images of Midwestern crops. As technology rapidly evolves, the way exchanges deliver data to clients has evolved as well.

Snail Mail to Click-Through Data

In just a few short years, CME Group’s Data Services business has undergone a transformation. In 2016, we were shipping physical hard drives off manual extracts from our data warehouse. Now, customers order online, agree to a click-through license, enter their credit card, and select from several delivery methods (none of which include a hard drive).

We’re extending our content library to support data providers like Orbital Insights, Tellus Labs, and RS Metrics, which provide satellite-based data correlated to specific CME products. Bantix Technologies and 1QBit supply analytics data, including machine learning. Crypto Facilities, Bloomberg, and S&P supply index data. We are also providing a data platform for other exchanges, and are excited to welcome the Johannesburg Stock Exchange as the first to take advantage of that opportunity.

Market Data Consumers Want Direct Access

We recently surveyed more than 100 clients consisting of banks, proprietary trading firms, hedge funds, commercials, retail traders and educational consumers on several topics around exchange data. One of the clear trends we’re seeing is an appetite to work directly with us on data acquisition. While 40 percent of respondents indicated they receive their data directly from us today, 63 percent specified they would prefer to license directly with CME, or do so in the future.

It would be a mistake to conclude this means market data seekers are moving away from the ISV community. With a global distribution to more than 170 countries and nearly 400 ISVs, it is simply more cost-efficient for mid-sized or niche content producers to send data through our network to acquire access to such a rich set of redistributors in lieu of trying to build their own bespoke connectivity.

Consolidating Data Sources

It should come as no surprise overall cost reduction dominates the business priorities list. However, reducing the number of data vendors and consolidating data sources are also high on the focus list.

From index providers to exchanges, market participants are already connected to CME Group and know our protocols so consuming new content is a relatively low friction point. This is also true with historical data. Research and development are a top ‘plan to use’ activity according to our survey results.

Delivery Through Cloud

We are also seeing an uptake in cloud adoption as a preferred delivery method for data. Historical data capture and delivery is the top cloud workload, with 45 percent of survey respondents currently using or planning to use historical data in the public cloud. Forward-looking uses including strategy development were not too far behind, according to our survey.

If you’re looking for an additional theme in the preceding chart, notice the top four initiatives involve public data and the bottom four include private data. Capital markets are still working through security in public cloud adoption.

Data sources are seemingly countless, and consumers in any industry often need support in making sense of it.  For exchange data, we supply some of the analysis work we conduct via open source for ‘alternative’ data we distribute. We’ve also rolled out tools like Order Book AI, a free machine learning application looking for patterns in our data.

As data sources grow, so will the demand for access. The platform-as-a-service that Johannesburg Stock Exchange is using is the latest example of making this process more efficient. But it is not just the makings of a trend for financial services. The quick delivery of a variety of data sources will soon be standard practice anywhere decisions are being made.

Adam Honore is Executive Director of Global Data Licensing Services at CME Group.

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