In today’s highly digitalised world, data is at the core of everything we do. The increased use of technology means that firms now produce and process more data than ever before. This is particularly pertinent in the financial sector, where the widespread
adoption of technology and introduction of a number of significant regulatory mandates now requires the consolidation and analysis of vast amounts of data, from orders and trades to communications and market data.
To enable this, there is a need for easily accessible, open and democratised information, something that regulations like MiFID II have tried to facilitate. Yet we still see a reluctance to share data across the industry, and firms are still using an array
of siloed systems and platforms – making it difficult to consolidate and gain a holistic view of information.
Being able to easily retrieve and audit a range of data from different trading and order systems, communications platforms and market data sources is not only essential for regulatory reporting purposes but represents a significant opportunity to gain insight
into business performance and improve operational efficiency. This is typically something only larger organisation have the resources to do successfully, leaving small firms vulnerable to regulatory scrutiny and unable to compete.
A core mission of MiFID II and other regulatory regimes is to improve transparency and level the playing field for market participants, and data democratization is key to this. This means making data more readily available to all firms, both large and small.
However, there remains a tendency among industry incumbents, such as traditional market data providers, to resist data sharing. We have also seen resistance from Approved Publication Arrangements (APAs) to publicise data free of charge, as the regulation stipulates.
A key component of data democratisation under MiFID II is the release of post-trade transparency data, yet a number of APAs are commercialising this at significant cost.
It is not all negative though. We have seen some great advances in this space, with new technology driving increasingly flexible hosting solutions and improved data visualisation - providing firms with cheaper and simpler ways of accessing to their data
and eliminating the silo mentality.
Intelligent data platforms are helping firms consolidate, normalise, retrieve and analyse data quicker than ever before. So while we are still seeing a reluctance to share information, technology is enabling firms to truly unleash the value in their data.
Data democratisation is here to stay, because when data made more readily available, it enables financial firms to better engage with information – complying smarter, improving their operations and strengthening client services – for the benefit of the financial
industry as a whole.