Fintech's next frontier: Data-as-a-Service

Data has always been important to financial markets. In 1850 Paul Julius Reuter used pigeons to carry stock prices between Germany and Brussels because they were faster than trains. Now there are not enough pigeons to carry the amount of data being generated on a daily basis. In the 21st century the financial services firms who emerge as winners will have unique datasets and be able to provide clients easy access to live streaming data, on-demand data and real-time analytics. In order to meet these competitive challenges the financial services industry is increasingly turning to “Data-as-a-Service” (DaaS) to help overcome the inflexibility of their legacy technology, cut costs and provide users with a better experience.

For example, Virtu Financial, the US market maker and infrastructure provider, said in May this year that it was launching Open Technology, a new Data-as-a-Service platform. Open Technology’s framework of standardised APIs allow subscribers to access Virtu’s curated and cleansed market-data, enriched transaction cost analytics across asset classes and the firm’s suite of multi-asset market impact models without having to write any code. In addition, the Covid-19 pandemic has forced staff to work remotely and highlighted the importance of being able to access real-time data from anywhere and at any time, while maintaining the necessary regulatory controls. The post-Covid world will look very different, with flexibility remaining key, so the importance of data and using it efficiently will only become more important.

In this Insights report, Mark Woolfenden, managing director of ETD; Matthew Cheung, chief executive of ipushpull; John Macpherson, deputy chair of the Investment Association’s advisory panel (Engine); Patrick Flannery, co-founder and chief executive of MayStreet; and Julien Dugat, fixed income client execution platforms and digital sales at NatWest Markets talk to the Realization Group’s Mike O’Hara and Shanny Basar about the opportunities for Data-as-a-Service to make capital markets more efficient and innovative.