70% see a barrier to switching data vendor
Data-driven decision-making has put an increased importance on collecting and analysing data. This process can be time-consuming and labour-intensive, leading many firms to outsource their market data needs. It’s not unusual for firms to rely on a single source of market data, but this can be a risky move.
Earlier this year, the UK Financial Conduct Authority (FCA) published a report looking into the wholesale data market. It found that wholesale data markets in the UK are highly concentrated, with users seeing “limited or no effective alternatives” to the key industry providers. In fact, the FCA found that 70% of the users it surveyed said they saw a barrier to switching vendor, or suggested switching was difficult.
Many respondents to the FCA’s study suggested that significant transition costs would offset any cost savings from using an alternative provider, making switching uneconomical. The switching costs that users identified included operational risk, the technology and development costs associated with changing system, and contract termination clauses including requirements to purge historic data.
Contract complexity
For those not looking to switch, respondents to the FCA’s study highlighted a lack flexibility in vendors’ pricing models. They noted that these models restricted their ability to limit their purchases to only the data they need and often made them subject to price increases based on improvement in data elements they do not use.
The Investment Association claim that criticised these “opaque” pricing models as make price comparison “impossible” and make it “difficult” to and see whether the requirement to treat customers fairly is being met. Against this backdrop, wealth managers and platforms can end up locked into contracts and legacy infrastructure, managing disparate sources across various departments that isn’t always suited to their needs. This complexity can cause difficulties for firms, slow down operations and increase the risk of errors.
Raw Knowledge do things differently
At Raw Knowledge, we do market data provision differently. When you outsource your data needs to us, we work specifically on your given universe. Whether its offshore funds, bonds, capital gains or income tax, our dedicated team of data analysts can source the information you need and help you determine your clients’ tax liabilities.
We conduct primary research and compare numerous sources to ensure the tax treatment of your investment is as accurate as possible. With over 25 years of experience in the financial services industry and numerous direct contacts with issuers and fund managers, we can also reach out for clarification when required, meaning all our data is up-to-date, traceable and verified.
You can have peace of mind knowing that every bit of data you receive has gone through a four-eye check every step of the way. From consuming the original data to transforming it into your required format, Raw Knowledge have stringent internal checks to ensure the highest data quality. We’re also totally transparent and can provide our source material at request. So, if there are any figures in doubt or your client has requested further detail, you don’t need to worry.
If you’d like to learn more about how we can help you with your market data needs, get in touch.
