Preparing for Year-End Market Data and Tech Renewals: Trends and Best Practices

As the year-end approaches, the market data and technology industries brace for its annual wave of contract renewals. With market data and technology becoming increasingly vital for firms, the importance of being prepared for these renewals cannot be overstated. Recent trends indicate a continual rise in prices, making it essential for firms to navigate these renewals strategically.

Why Market Data Costs Are Rising

1. Acquisitions and Industry Consolidation

Consolidation in the market data industry has created larger players with greater pricing power. These mergers often lead to increased fees as companies recoup acquisition costs, for example:

• S&P Global and IHS Markit Merger
• Blackrock’s Acquisition of Preqin
• Broadcom’s Acquisition of VMware

2. Electronification and Automation

As financial markets evolve, the demand for faster, more sophisticated data services continues to rise, driven by the need for automation and cutting-edge technology.

• Market Speed: Rapid market activity increases the need for high-speed, high-quality data.
• Advanced Tech: Machine learning and AI drive efficiency but come with increased costs.
• Specialized Data: Tailored data sets designed for specific applications are driving up acquisition costs.

3. Proliferation of Non-Traditional Data Sets

The financial industry’s hunger for diverse data has led vendors to offer a wider range of non-traditional data, often at premium prices.

• Diverse Data: The demand for alternative data sources is growing.
• Quantitative Trading Insights: Firms seek insights from non-traditional data sets for trading strategies.
• Premium Pricing: Vendors introduce premium pricing models to capitalize on this demand.

Interconnected Trends: The growth of non-traditional data and technological advancements are closely linked. As firms rely on more complex data for strategic decisions, the costs continue to rise.

Avoiding Exorbitant Fees: Best Practices

To avoid unnecessary expenses, firms must implement effective management strategies:

• Contract Management: Track renewal dates and negotiate proactively to prevent price hikes.
• Vendor Management: Use vendor landscaping and maintain relationships with providers to negotiate better deals.
• Product Management: Monitor license usage and ensure compliance to avoid unnecessary fees.

How Concertiv Can Help:

At the heart of Concertiv’s approach is its team of domain experts and professional negotiators, who possess the deep knowledge and experience necessary to secure the best rates and contracts for your firm. While we have the tools and technology to support your market data management, our people make the difference. We understand the intricacies of this complex landscape, and our expertise ensures that you’re always positioned to get the most favorable outcomes.

• Peer Benchmarking: Our negotiators leverage insights into how your peers manage market data costs, giving you a competitive advantage to ensure you’re getting the best possible deal.
• Vendor Landscaping: Navigating the landscape of market data providers can be challenging, but our team’s expertise helps you secure favorable terms by understanding the vendor ecosystem inside and out.
• Concertiv360 (C360) + License Management: Concertiv360 provides cutting-edge tools for managing licenses and access, but more importantly, our people use these tools to ensure compliance, manage costs, and avoid unnecessary fees—giving you peace of mind.

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