2012 Review: Users Eye Internal Projects, Intelligence

Continued economic uncertainty and budget constraints led many firms to seek to leverage existing investments more and focus their efforts on new fees and policies from suppliers, such as CME Group’s 15 percent fee increase (IMD, Feb. 20), or FTSE’s annual display license, which UK-based buy-side firms Slater Investments and Unicorn Asset Management both rejected (IMD, Sept. 10), or contributing to industry association-led efforts, such as Cossiom’s Niagara initiative (IMD, Feb. 27).

For example, one of Wells Fargo’s biggest initiatives was an internal project to improve its contracts renewals process for market data services, to make it easier for the firm to manage renewal negotiations and—where needed—find alternative services (IMD, June 18). Danske Bank also completed the rollout of a vendor management program to cover all its suppliers this year, which provides a fact-based structure for assessing factors such as spend and performance to support sourcing decisions, and which it outlined at Inside Market Data’s Paris Financial Information Summit (IMD, June 18).

Meanwhile, BMO Financial Group centralized its market data management and infrastructure to support better management of data sourcing and expenditure (IMD, Aug. 20).

But firms weren’t just spending to make their internal processes more intelligent: Quantitative asset manager AlphaSimplex Group rolled out OneMarketData’s OneTick tick database and complex event processing system to support data processing for the development of quantitative trading and risk models (IMD, June 18).

Some firms also sought intelligence about their existing investments in low-latency technologies, such as New York-based low-latency agency broker Pico Quantitative Trading, which rolled out Corvil’s CorvilNet latency monitoring platform to measure network performance, data quality and execution latency (IMD, June 25).

Indeed, not all firms are backing out of the latency race (see related Year-in-Review story). For example, Dutch automated trading firm Deep Blue Capital expanded a deal with low-latency data vendor QuantHouse to source data from markets across Asia via the vendor’s QuantFeed low-latency feed, to support a trading expansion into the region (IMD, June 7)—as did Swiss private bank Vontobel Group (IMD, Oct. 22)—while Lime Brokerage deployed French FPGA data technology vendor NovaSparks’ feed handlers and Book Builder tool in Nasdaq’s Carteret, NJ datacenter to provide lower-latency data to its systematic trader clients (IMD, June 18).

However, with intelligence proving to be a greater competitive differentiator than speed, firms were prepared to invest in tools that help them appear smarter to clients—or which make clients feel smarter—such as Australian online broker Bell Direct, which rolled out technical analysis tools from Ottawa, Canada-based charting and analysis provider Recognia (IMD, March 19). Some looked elsewhere for intelligence, like Los Gatos, Calif.-based mutual fund and crowd-sourced research provider Marketocracy, which partnered with EAB Investment Group to add options strategies to its equities picks (IMD, Sept. 17).

And as firms broadened their focus into new regions and asset classes, vendors found their services being used by new types of end-users, such as the trading arms of energy utilities and advisory firms that trade and hedge commodities. For example, E.ON Edis, part of German energy supplier E.ON Group, extended a deal for GFI’s energy and commodities data (IMD, Jan. 16), while PGNiG Sales and Trading, a division of Polish oil and natural gas company PGNiG, and Hungarian power company MVM Group’s trading arm both rolled out Trayport’s Global Vision trading platform to provide a consolidated view of data from multiple markets (IMD, July 16, July 23).