Industry Vet’s Startup Consultancy Targets Brokers’ Data Sales, Licensing Needs

Mike Kirby, a 35-year veteran of the broker-data world, has set up MWK Data Services, a consultancy aimed at helping startup and growth-stage brokerages create licensing structures around the price data generated from their brokerage operations. MWK will help those brokerages derive revenues from data sales and establish compliance requirements to prevent unauthorized use of their data.

“There are still many brokers who just give their data away, who don’t have the infrastructure set up to monetize it. We can assist in developing that full data strategy, including creating a roadmap, and taking inventory of all the data they have available,” Kirby says. “A lot of the smaller brokers are focused on their underlying business … and their legal department doesn’t have the expertise to set up a licensing model to protect their data and prevent leakage.”

MWK will provide four key services: data strategy, helping firms turn their data into a revenue line; contract administration, helping firms’ legal teams create data-license models and employ administration tools; sales, selling data on clients’ behalf, as well as building their sales teams; and product development, identifying opportunities to create new products based on a client’s data that makes the data more valuable and marketable.

The company will focus on brokerages beyond the top tier of interdealer brokers, including energy brokers, who might send clients daily mark-to-market reports but have no formal license agreements to prevent that data from being further distributed by their clients. Kirby will also look to find traction with startup electronic brokerages that understand the need to distribute data and appreciate its value as a revenue source.

“They may have the trading technology sorted out, and recognize that they can develop market data products from their electronic platforms, but are focused on bringing on trading participants, rather than being focused on data yet,” Kirby says.

While these firms may have good relations with their front-office clients on the buy and sell sides, they may not know the right people to deal with in a firm’s market data management or purchasing functions. Kirby’s experience (see below) over many years has given him exposure to buyers at potential client firms and distributors.

“I have a big Rolodex. I know the market data administrators at a lot of the big firms,” he says.

History Repeating

“I’m basically doing exactly what I did when I was setting up Prebon Yamane’s data business,” including creating a central database of every product brokered, he says. “And I can do this for clients now, and create new products that make sense for their audience.” For example, many firms may have raw price data, but not indexes and analytics that make that data more marketable.

Kirby started at Prebon Yamane in the 1980s as an accountant before becoming a money-markets broker and moving into managing its market data and desktops.

“Back then, we had our prices on Reuters and Telerate terminals, but it was primarily for marketing purposes, and the vendors didn’t pay for it,” he says. Recognizing an opportunity to develop a new revenue stream, Kirby spoke to the CEO, and was tasked with building a data sales and licensing business from scratch. He stayed at the firm another 13 years, through the 2004 acquisition by Tullett & Tokyo that formed Tullett Prebon, before moving to Icap’s Information Services arm in 2010. He remained with the NEX division following the sale of Icap’s brokerage business to Tullett Prebon, and NEX’s subsequent acquisition by CME Group.

Until March this year, he remained with CME Group in a transitional role post-acquisition to assist with the integration of the NEX Data business into CME’s Data Services division. He was about to start a new role at another broker when a Covid-related hiring freeze saw that vacancy disappear overnight. In the meantime, many of his contacts, learning that he was no longer at CME, began to reach out for help with their own data issues. It was then that Kirby realized his expertise might be better suited to providing independent advisory services.

Over time, depending on demand, Kirby says he expects to hire other staff, and will also look at partnering with other consultants and third parties to grow the business.