Investment Services Data Market Structure

by Mayiz Habbal, PhD, June 9, 2008

Abstract

New York, NY, USA June 9, 2008

Once considered an unattractive segment of the financial data market, investment services data is now the focus of many executives in the financial industry.

Investments without supporting data to help in trading and servicing are hard to imagine. The evolution and growth of the securities industry are direct results of the pervasiveness of investment data among market participants. In fact, market efficiency is predicated on the free flow and availability of data. Information technology is nothing but an enabler of data pervasiveness and accessibility.

Unlike the market for content targeted at the front office (market/pricing data), the market for data targeted at the middle and back offices (investment services data) has long been overlooked and regarded as secondary. This perspective, however, is gradually changing in the marketplace, and recent events have added momentum to what Celent identified as an important research topic in the middle of 2007.

In a new report, , Celent studies the market structure of investment services data from the perspective of five segments of market participants and aims at:

  • Capturing and reporting on this economic model and the dynamics that govern the relationships among market participants.

    Examining the decision-making process executives (distributors, redistributors, or end users) go through to source this data.

"Sourcing of investment services data by end users is a serious and complex decision. The quality and completeness of this data is as important as the latency and quality of market data," says Mayiz Habbal, Senior Vice President of Celent’s Securities & Investments Group and co-author of the report.

"Executives in the middle and back offices tasked with sourcing this data are becoming more selective and demanding as well as influential," he adds.

The 42-page report contains two figures and four tables. A table of contents is available online.

 

Members of Celent's Institutional Securities & Investments and Retail Securities & Investments research services can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

 

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

New York, NY, USA June 9, 2008

Executive Summary 3
Introduction 5
  Investment Services Data 5
Methodology 6
End Users 8
  Use of Investment Services Data 8
  Sources of Content 9
  Purchasing Decisions 10
Primary Content Providers 13
  Nature of Content 13
  Market Behavior of Primary Content Providers 14
  Primary Content Providers Challenges 15
Distribution or Aggregators 17
  Types of Aggregators 17
  Aggregators' Practices and Relationships 18
  Market Behavior of Distributors 19
Redistributors - End Users 20
  Types of Redistributors 20
  Prime Brokers 20
  Custodians 23
  Correspondent Clearing Service Providers 24
Redistributors - Software Vendors 26
  Portfolio/Trade Order Management Systems 26
  Compliance/Risk Management Systems 26
  Portfolio/Investment Accounting Systems 27
  Market Behavior of Software Vendors 27
  Trends in Trading Systems 28
Market Structure and Dynamics 30
  Relationships Among Market Participants 30
  Conclusions Regarding the Data Marketplace 31
Recommendations for Primary Content Providers 33
  Business Models 34
  R&D Investment 34
  Sales 35

 

Sign in to download reports and access personalized information