Kimsey debuts ‘Who bought what’ dataset to help vendors target sales

UK-based capital markets technology and data research firm Kimsey Consulting will this week release a new report detailing spend on technology and data by financial markets participants, ranked by country and geographical region, to allow firms to monitor their exposures and enable vendors to plan strategies and target potential customers based on cycles in regional spending.

The report is available as PDFs or Microsoft Excel spreadsheets of charts and data, which are updated quarterly, or detailed raw data files that are updated weekly. It comprises almost 20 years of aggregated data on the number of deals reported by financial institutions. 

The data is broken out by country and region, as well as by what type of firm (buy-side or sell-side) is driving the spend, and what areas of technology are responsible for most deals, such as pre-trade, at-trade, post-trade, risk, regulation, communications and connectivity, and infrastructure.

Vendors and providers need this type of information because there’s no better indication of what will happen in the future than what’s happened in the past

Stephen Kimsey, Kimsey Consulting

The data is drawn from Kimsey’s Indago deals database, which contains more than 16,000 records, coded against more than 80 variables—such as data customer and vendor firms, type of customer, type of technology, and the countries/regions where the technology is being used—covering more than 190 countries, presented globally, regionally, and broken out by individual country. The database covers around 7,500 buy-side and sell-side firms, and nearly 2,300 vendors, and adds around 700 records of tech purchases every year.

Gathering data

Stephen Kimsey, founder of Kimsey Consulting, says he originally began collecting the information to validate the research behind his other reports, which provided industry spend forecasts and qualitative polling of end-user opinions about widely used trading floor products and services. The data helped him keep track of which firms are buying specific technologies, and also on what firms would have end users with experience of those products, and who would be qualified to share their opinions for Kimsey’s polls.

Using the raw data files allows clients to select which variables are of interest to them, such as type of technology, timeframe, or region. Kimsey says he expects salespeople, strategists, and management at technology and data providers to find the data useful in spotting trends in purchasing of different products across user types and geographies, as well as venture capital and private equity executives trying to match future demand against the companies they are following or are invested in, to make sure those companies are offering the right products to the right user types, in the right regions, at the right time.

“Vendors and providers need this type of information because there’s no better indication of what will happen in the future than what’s happened in the past,” he says, noting that sales cycles and buying trends operate in repeating patterns. “Having that information about where the markets are going, who your customer is, where your customer is, and what types of technology they’re buying is very valuable.”

Kimsey acknowledges that because his statistics are based on publicly reported contract wins—which are a small minority of actual deals, most of which go unreported—the numbers may only represent between 5% and 10% of the total market for financial technology expenditure.

Not all deals are announced and recorded for a number of reasons—for example, confidentiality clauses in a contract, because a company may be privately held and not need to report deals, or because a deal may be a renewal that goes unpublicized. Furthermore, vendors are typically more likely to publicize big contract wins, even if most of their business comprises larger numbers of smaller deals.

In addition, the report only considers the number of deals, rather than the value of deals. Kimsey says this is because even reported deals rarely include financial terms of the contracts, and because of the number of variables that would be involved in attempting to estimate the value of deals.

However, he says clients can apply their own weightings or knowledge of their and their rivals’ pricing policies to extrapolate their own values for estimated spend.