Capital markets today: how do you manage the data explosion? 

Managing a massive increase in data must be a priority for capital market firms that want to maintain a competitive advantage. 

Michael James, Capital Markets Sales Specialist, Colt Technology Services

Eleni Coldrey, Business Development Director EMEA for Financial Services, Equinix

In our new, joint Colt-Equinix mini-series, we’re looking at the factors disrupting the smooth operation of markets and what firms can do to protect their longer-term interests and performance. We began by looking at the effects of increased volatility and went on to examine what exchange moves mean for capital market firms and the shake-up caused by moves to the cloud. Now we’re exploring the impacts of the data explosion.  

Data breeds data  

We live in a society where we take every opportunity to capture data, valuing it as the basis of sound decision-making. We have the capability to analyse data from every angle and to layer data to create new insights.  

Alternative data is booming, and financial firms are weaving it into their plans. From photographing supermarket car parks to judge shopping numbers to analysing crop fields in Asia to assess likely crop yields, new data sets are increasing the load on data infrastructure and systems as firms look for an edge over their competition.  

At the same time, artificial intelligence (AI) and the algorithmic trading it drives are data hungry, with an emphasis on working better the more data you put into them. As AI evolves and gets more complex, it’s going to want to ingest more data. We’ve passed a tipping point now, and AI and machine learning will only continue to grow.  

Increased market volatility is also driving up the volume of data, reflected in the new data fields in fixed income and derivatives trading demanded by MiFID II. We’re seeing data growth, too, around the management of Environmental, Social and Governance (ESG) factors. As operators launch and trade more ESG instruments and products and regulators require the financial community to monitor and report on the ESG performance of digital assets, data levels will shoot up further.  

Meeting the data challenge  

It’s critical that capital markets firms plan for this data explosion, making sure their infrastructure can cope for at least the next five years. Being able to ride the data wave, wherever it goes, will be the key to finding and maintaining a competitive advantage. 

No matter what size your organisation, it’s important to have fast, effective data access that puts you on a level playing field when it comes to time-to-market and the latency of data sets. To enhance decision making, a complete, real-time picture based on democratised market performance data is vital. From data feeds to jitter, packet loss, and A and B feed monitoring – you need access to it all, and all with millisecond granularity. 

The roadmap to a changing data landscape  

Our Colt-Equinix partnership helps capital markets firms establish a leading position through more effective data management. Colt’s connectivity and innovative solutions fit seamlessly with the Equinix footprint, creating a partnership that offers effective ways to monitor data flows. Colt’s Market Data Monitoring System sits in data centres next to the exchange and provides real-time content-aware monitoring and alerting. It flags up market data issues based on predefined conditions and provides end-to-end visibility from source to destination.  

As we’ve seen in this series, with volatility and fragmentation of markets increasing, coupled with newer and more complex data sources, how will you navigate this ever-changing landscape?  

Choose the right partners to guide you and get in touch to learn more about how our Colt-Equinix partnership can help your firm thrive. 

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