Firms Are Investing in Market Data Management Despite Turbulent Economy

Despite the turbulent economic climate and budget cuts, more firms are increasing their investment in market data management than cutting back, according to a new report by StreamBase .

The report's author, independent analyst Bob Giffords, interviewed over 260 buy-side and sell-side firms around the world for the report on market data management trends for 2009.

The study found that 43.1% of firms are considering switching data providers in 2009. Of those, 65.8% cited budgets as the motive.

Overall, 50.3% considering a switch said they are looking to improve market data quality.

Meanwhile, 32.9% of those who want to switch want wider market coverage through additional data sources. And 29.7% said they want richer data options.

StreamBase said 43.1% of sell-side firms and 35.9% of buy-side firms plan to increase spending on low-latency data and supporting technology in 2009.

The report also found that 46.5% of sell-side firms and 33.6% of buy-side firms are looking for cross-asset data vendors.

"For years market data management has been the backwater of trading systems; now, it's rising to the same level of importance as the actual trading models," Mark Palmer, CEO of StreamBase, said in a release.

"It's no great surprise that reducing cost, increasing the quality, and maintaining flexibility and coverage of market data are all key drivers in 2009. Having an underlying trading architecture that allows traders to quickly and cost effectively add, change or remove data sources while improving data quality is key to successful trading in 2009," he added.

Commenting on the results, Dr. Rob Almgren of Quantitative Brokers, said in the release: "Market data is now as important as the quantitative models. The best trading system in the world can't generate good results if the incoming data is delayed or incomplete, or if you can't apply your analytic models fast enough to keep up in real-time."

Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio