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Debunking Five Misconceptions About Market Data Transformation in the Public Cloud

Sep 23, 2020 By Kerry Langstaff Categories - Industry Trends

Debunking Five Misconceptions About Market Data Transformation in the Public Cloud

70% of respondents in a recent Greenwich Associates Market Data Study felt it is critical that their market data provider offers a cloud-based solution. But if the cloud is so important and offers such benefits, why isn’t it used more widely when it comes to market data?

Because many still have fears about the public cloud. Here we will debunk five common misconceptions about cloud-based market data.

Misconception 1: Managing my market data in the cloud is expensive

Not true. The cloud will save your organization money in the long run. By working with public cloud providers such as Amazon Web Services (AWS), buy- and sell-side firms are able to re-think and re-design legacy operating models and implement cost-saving measures that decrease the total cost of ownership. Among the top cost issues when migrating market data to the cloud can be the need to rewrite applications to optimize them for the cloud - especially ones that are very complex or have a high degree of customization. But with a cloud-native market data management solution, you can usually deploy right on top of existing feeds and keep your existing data sources.

When you are ready to migrate make sure you choose a cloud-native vendor solution, such as Xignite's Market Data Management as a Service that offers:

  • Market data vendor-agnostic connectors to load the data you license from Bloomberg, Refinitiv, ICE, and numerous other providers. 
  • A web-based Management Portal, your single access point to managing your market data and users in a single comprehensive view.
  • Emulated REST APIs, which means the process to request files and to poll for reply/response files should not be noticeable to your users. The only difference is that the user will be sending and receiving from a different address.
  • Built-in dashboards and custom reports to give yo an understanding of cost-impacting data requests, generate analytics reports with firm-wide metrics for cost across vendors.

Misconception 2: My on-premises setup is more secure than the cloud.

Not true. The cloud is extremely secure. The AWS cloud is designed for the most data-sensitive organizations, and Technology and Consulting Partners in the AWS Partner Network offer hundreds of tools and features to help meet objectives around visibility, audibility, controllability, and agility. From capital markets and insurance to global investment banks, payments, and emerging fintech startups, many FIs already rely on AWS today. It is also important to remember that market data does not contain any personally identifiable information (PII). Although access and usage are restricted to those who license it from vendors and exchanges, market data such as historical stock prices are publicly available data. With a cloud-native data distribution solution, you can usually deploy right on top of existing feeds and keep your existing data sources.

Misconception 3: I Will have less control of my market data in the cloud.

Not true. Your control will actually increase with the cloud. With cloud-based market data, FIs maintain ownership and control of their data, including the ability to manage permissions and entitlements, and distribution. They authorize who can access the data and can create rules around when, how often, and why. This can help tremendously when it comes to audit time. Once the financial institutions move to an on-demand model powered by the cloud, they actually gain complete visibility and tracking of their market data. They can slice and dice usage to granular levels and see that information visualized in one place. For instance, they can see the number of calls for specific security and usage by a certain individual or team. This transparency helps to optimize data and makes cost allocations much simpler.

Misconception 4: Compliance is difficult in the cloud.

Not true. The cloud will make complying with vendors and regulators much easier. The financial services industry is one of the most regulated in the world with complex auditing and reporting requirements. With cloud-based market data, FIs can sail through those data provider audits with detailed reports of data usage, avoiding back billing and fines. From a central market data hub, data owners can control user entitlements and easily comply with who, where, and how the vendor's data is being utilized.

Misconception 5: I can’t get real-time data in the cloud.

Not true. Many financial insitutions stream real-time market data from the cloud today. Real-time stock quote tick data can be streamed via cloud APIs in micro-seconds. Vendors such as Xignite offer highly responsive APIs you can use to obtain real-time stock quotes for global exchanges to power visual real-time applications. Real-time financial data can easily be embedded into spreadsheets, websites, mobile apps, and other corporate applications, dramatically reducing the time to market for apps that need real-time stock prices. Cloud APIs are being used by fintechs from digital brokers and mobile trading apps to robo-advisors and social trading platforms. Robinhood, eToro, SeekingAlpha, and StockTwits are just a few of the startups who are using Xignite’s cloud to power their real-time apps and portals

Kerry Langstaff

Kerry Langstaff

Chief Marketing Officer

Kerry Langstaff spearheads marketing and partnership efforts at Xignite. She is passionate about driving fintech innovation and has spoken at numerous fintech events around the world. 

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