The sales model for market data is changing toward a more collaborative, partnership approach, according to a new report by Burton-Taylor, a financial market data and information research and consulting firm.
“Meeting The Clients Where They Are: A Look at The Move Toward Mobility And The Challenges Data Providers Face,” provides a comparison of the traditional market data vendor model vs. the new model.
Financial institutions are looking for more advice from their data providers on what data is available, how it will help them gain competitive advantage, so data provider sales people need to understand not just the clients’ technology, but their business. Clients expect the data providers to be able to suggest which data sets will provide the best value for their particular business.
“Being a partner, the providers will have to be more of a business analyst in addition to a data analyst. They must understand the customer, their workflows, and the data. Providers must engage not only the client, but clients of the client.”
They also have to get the data into the clients’ systems. This has become more complex as the devices used to receive the data have expanded from traditional desktops with multiple screens to tablets and smartphones with much more restricted display space.
“Data providers must realize what is important to be seen on the first/top screen where space is limited; for example, what information should be on a telephone screen instead of a large monitor.”
No surprise, then, that data providers said the biggest change from 2020 to 2021 was a 12% increase in the time spent with customers to better understand their needs. While most market data is still provided under the traditional model, increasingly clients are asking for more. They’d like to buy only the subsets they use.
“Data providers have held to the traditional model, but now are adjusting to new demand,” Burton-Taylor researchers found. One result is that data providers need to spend more time with potential clients learning their needs, writing the contract, and reviewing the contracts.
Contradictions abound. Clients want a consulting relationship, but they also want self-service portals, faster processes and the ability to do it independently. But self-service independence can lead to unanticipated results, the report noted, citing Snowflake as an example.
“In Snowflake, a user can click on a dataset. However, each dataset contains its own licensing agreement. The client’s legal department needs to discuss it with the data provider and determine who may use the data and for what purpose(s). What should take only a few minutes can take up to one month, if not longer. In the interim, the customers will have to find an alternative data set.”
It doesn’t help that data providers “are not large monoliths… Sometimes, there is competition among the employee groups at the data providers” such as one group is promoting terminals and another is trying to sell data.
New generations of customers are also changing what they want from data providers, the report said, in part because they have more technical skills than previous generations.
“When people who are now 45 graduated college, they were trained in spreadsheets; while people who are 25 were already trained in Python and R. Younger generation employees, millennials, are accustomed to having data, and even TV, audio, and videos, wherever they want it, whenever they want it, and on any device they want it. As they enter management and decision-making positions in their career, the ‘meet the clients where they are approach’ will only continue.”
Data delivery is more complicated in the post-Covid era. People are not at a centralized location as much as they were just three short years ago before Covid, said a Burton-Taylor researcher, noting that financial firms went live with work-from home in March 2020 without a test run. The report cited a prediction that 25% of all professional jobs in North America will be remote by 2022.
“Although we did not see a breakdown by discipline or subject, with the number that high and technology rapidly advancing, we could reasonably assume that it might be across all disciplines,” the researcher added.