The huge growth in market data consumption over recent years has been driven by a number of factors including machine learning and artificial intelligence (AI), more passive investment strategies, and regulatory requirements driving application modernisation in areas such as real-time risk. This has led to an increase in demand for the right tools to control, manage and monitor data usage, ensure compliance with exchange policies, and follow best practices when it comes to data access and control.
Most recently, the pandemic-accelerated migration of less latency sensitive applications to public cloud environments has posed a new challenge in ensuring continued access control and policy compliance for market data consuming applications. This creates opportunity to revisit legacy entitlements systems and introduce best practices in terms of data provision versus control. With the continued preference for firms to consume Software-as-a-Service, it also presents an opportunity for a new, fully managed Entitlements-as-a-Service solution.
In this modern age of multiple vendors, platforms, and solutions, an independent entitlements management system that enables firms to access data from multiple vendors and sources whilst controlling its usage from a central point is a necessity. This compares to the prevailing modus operandi where firms generally use separate entitlements systems from each of their data vendors, all operating independently. Under this current model, keeping up with changing user access privileges and permissions, ensuring that the right data reaches the right licensee in a timely manner, and optimising consumption and spend is a constant headache for market data managers.
The key to unlocking this conundrum lies in separating the data provision and the entitlements management components, rather than having them bound together as they are at present. This can be achieved by using a single, consolidated entitlements system that is agnostic to the underlying data service and supports multiple different market data providers and feeds.
This vendor-neutral approach allows firms to source data from different vendors (e.g. Bloomberg, Reuters, IDC), to be highly selective about the data they use and the entitlements that they grant, and to do it all through a single UI or API, rather than being tied into vendors’ existing feed and entitlements silo. An added benefit to this approach is that it facilitates much easier integration with other systems across the enterprise.
With firms at various different stages along the journey of migrating their market data applications to the cloud, these are still early days. However, the movement is accelerating, particularly in the wake of the Covid-19 pandemic and the shift to remote working. When undergoing such a migration, it is essential for firms to have the relevant and appropriate controls in place to stay compliant with exchange policy and reporting. If firms are to maximise their investment in cloud, it is important to not simply lift and shift an existing solution but take the opportunity to re-engineer the approach to further streamline their operations and reduce the environment total cost of ownership.
A modern, cloud-based entitlements solution should be delivered as a service, be cloud agnostic and align pricing with consumption. It should offer both an API and a front-end to allow for integration with downstream systems, such as inventory systems, to further automate the process and provide access natively within cloud environments without the need for any additional, physical infrastructure.
At Vela, we used these principles to drive the migration of our existing Entitlements product (aka DART Entitlements) to run natively in cloud environments. This is already operating to support our own market data feed, SuperFeed, which is now running and available in AWS, and the next evolution of the product is now available for clients to test as a standalone, cloud agnostic, Entitlements-as-a-Service solution.
Just as the cloud becomes more widely adopted for market data distribution in future, we will continue to focus on delivering value-added, efficient entitlements management to meet the ever-changing data environment.