AI, Machine Learning Will Drive Market Data Consumption

⦿ Executive Snapshot

What: A report highlights AI and machine learning's growing impact on market data consumption among asset managers.
Who: SIX, Crisil Coalition Greenwich, asset managers, wealth managers, private banks.
Why it matters: The findings underscore a significant shift in data consumption practices, driven by technological advancements and the need for real-time data in a 24/7 trading environment.

80% of asset managers view AI and ML as key drivers of market data delivery over the next two years.
65% of respondents use real-time data throughout the trading day, influenced by the rise of 24/7 trading.
Almost 70% of participants expect a budget increase of 1% to 5% for market data, particularly in index, risk, regulatory, and crypto data.
63% of participants now use public cloud for data connectivity, up from 30% in 2023.
53% of respondents believe that cloud will enhance the delivery of streaming data.

The increasing integration of AI and ML in capital markets reflects broader trends toward automation and efficiency in financial operations.
The shift from direct-from-source data to reliance on market data vendors signifies evolving preferences in data sourcing and delivery models.

Immediate implications include enhanced data delivery capabilities, enabling firms to make more informed investment decisions and manage risk effectively.
Long-term, the focus on AI/ML and cloud infrastructure could reshape market data management practices, requiring firms to invest in robust data governance.

Potential risks include challenges in data quality and accuracy as firms adapt to new technologies and seek diverse data sources.
Regulatory complexities may pose obstacles, necessitating firms to develop comprehensive data management practices to navigate compliance effectively.

Future developments in AI/ML applications in market data and cloud infrastructure adoption will be crucial to monitor.
Increased spending on market data and shifts in data sourcing strategies will signal firms' adaptation to the evolving landscape.