The vast majority (80%) of fund managers expect their market data costs to increase across all asset classes, suggests recently published research.

A survey conducted by benchmarking provider Coalition Greenwich found that spending on market data will increase by an average of 10% over the next year for priority areas such as fixed income, equities and alternatives. For all other asset classes, the increase will be closer to 5%.

The research, titled Market Data Spending on a Roll, which canvassed 75 asset managers in the US, UK, Europe and Asia-Pacific, found that asset managers are prepared to spend more in search of higher quality and more accuracy. Nearly three-quarters (72%) are using real-time data during the trading day, while 67% have cited problems with data accuracy as the main reason to change providers.

But while managers may seemingly be prepared to put accuracy above cost, various regulators have highlighted what they see as excessive costs for market data.  For example, in 2019, Esma launched an investigation into the high fees charged by market data providers following the introduction of the MiFID II regulation.

“This upward trend in spending reflects more than just the annual increases baked into contracts; it reflects strong and growing underlying demand for market data,” said David Easthope, senior analyst for Coalition Greenwich market structure & technology and co-author of the report.

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