Navigating traditional data: Challenges and innovative solutions for data buyers and sellers

This is the second blog in a series of traditional/market data topics from Neudata. Read the first post to discover the difference between traditional and alternative data.

‍What is traditional/market data? An essential guide

Traditional/market data includes any source of data that is part of the “traditional roster” of sources asset managers typically use in their standard market analysis, from share prices to trading volumes.

Traditional data also includes any source that is widely accessible and structured, typically by convention or regulation. 

It includes the large stock exchange groups, which have specialised in equities but are expanding their fixed-income offerings, and the big aggregators providing access, often via bespoke “terminals,” to a wealth of financial information in a one-stop service.

‍Top pain points in traditional data: Challenges for data buyers and sellers

Given its longer heritage, domination by a smaller number of providers and, in theory, simpler characteristics when compared to alternative data, the market for traditional data should be more straightforward to navigate.

But that has not been the case. There are many obstacles standing in the way of an optimally efficient buying and selling process.

Challenges for data buyers

Neudata considers the below list to contain the most common pain points for users of traditional datasets:

1. Pricing transparency. As the cost of service increases every year, market data spending increases too. Buyers want to know how pricing models work and why they’re being charged more year-on-year, but typically don’t have the time to get to the bottom of it.

2. Outdated marketing. The data market is so fast-moving that information on a product’s features may become stale after only six months. This is a reality that many catalogues offered by data providers face too, meaning much of their publicly available marketing quickly becomes outdated.
   
   
3. Lack of normalised comparisons. Even when a data provider’s catalogue is up-to-date, the fields through which it evaluates a product are different to the fields another vendor evaluates products through. This makes it very hard to draw normalised comparisons between different offerings. A common language is required.
   
   
4. Human capital restraints. For every product a buyer is interested in (and in the absence of comprehensive and timely product-level information), a buyer needs to spend 30 minutes on a call with the vendor, and often more than that to assemble their notes, make follow-up questions and consider with colleagues. These time constraints means that data users are often bogged down in the details and can miss out on datasets that are gaining traction among their peers. 

Taking into account that some buyers — for instance, large multi-strategy hedge funds — can be subscribing to hundreds of products at the same time, gathering intelligence about market data vendors becomes an extremely time-consuming process. Outsourcing could be a more efficient solution.

Challenges for data sellers

There are also pain points on the data seller side.

1. Control of intellectual property. Most vendors we speak to say they fear an informational leak to their competitors. Sharing more public information that’s accessible by rivals could risk a product’s competitive features becoming widely known, allowing competitors to catch up more easily.‍
2. Reaching intended audience. Data vendors are looking to make contact with as many data buyers as possible, but it’s hard to gather their audience in one place. Their contacts often leave funds to join rivals or start up on their own, and it can be hard to know which people at a new firm have responsibility for building relationships with data vendors. ‍
3. ‍Selective budget allocations. Data sellers need to be savvy to ensure that their marketing efforts provide real ROI — namely by making sure they get their products in front of as many qualified data buyers as possible. 

‍Key challenges in the traditional data market: A summary

Even the biggest data buyers, like hedge funds with sourcing teams of 20-40 people, can find working with data vendors a challenge. 

Why? They're sourcing 200 or 300 data products all at once, potentially from 200 different data providers. There just isn’t enough time for each member of the team to speak with all the data providers that they're sourcing data from at any given point, but also to speak with other data providers that they should be evaluating.

‍And if it’s that difficult for the largest data firms, think what a challenge it is for the smallest.

The result? Data providers will not optimise their sales and buyers will not find the best datasets for their requirements.

Even in a hypothetical scenario where buyers have limitless resources to find the best data, there is no guarantee sellers will reach them properly while retaining control over the information they present externally and keeping materials updated.

Finding a better way: Innovative solutions for traditional data challenges

Neudata believes that navigating the ecosystem of traditional/market data doesn’t need to be so complicated or time-consuming. 

We have developed a service to help data buyers and sellers in the traditional space, in a way that Neudata Scout does in the alternative data market.

This new product will cover traditional/market data, which includes:

1. Company-reported data, such as fundamentals and financials.
2. Data management data, like security master files.
3. Market data, such as pure-play pricing and reference data.

‍It will meet the demands of buyers and sellers:

‍Buyers need to be able to access up-to-date information on data products and compare them with alternatives, understand which datasets are being used with success across the ecosystem and access a directory of all of the new and existing vendors that offer relevant services. Given internal restraints, an outsourced service would be preferable.

‍Sellers need to be able to reach a bigger pool or relevant prospective clients without excess spend or yielding their competitive edge.

Introducing Neudata Ranger: A game-changer for traditional data intelligence

The service, Neudata Ranger, will provide data buyers with deep technical intelligence on market data sources, and help sellers reach potential buyers in a more efficient way.

"Having a dedicated market data product allows us to build on our reputation of providing unbiased, comprehensive alternative data intelligence to the investment community," says Rado Lipuš, founder and CEO of Neudata. "Neudata Ranger represents a natural step forward for us, as we respond to client demand for better traditional/market data intelligence products.”

Comprehensive traditional data insights: Targeted, timely, total coverage with Neudata Ranger

Neudata Ranger is an ultra-focused and targeted scoping tool for data buyers; an initial filter to make it easier and quicker to navigate the rich field of data providers.

Neudata Ranger not only lists individual sellers and their attributes, with up-to-date information. It places products within the context of the wider market. The 20+ person research team has strong links with the providers that are listed, keeping the information relevant and focused. Pricing transparency, a top priority, is easier to achieve by accessing the platform compared to doing research independently. A continuously updated resource to be constantly returned to. Leverage our expertise to help you make better buying decisions.

On the data seller side, Neudata Ranger allows your product to reach the right prospective customers in the most efficient way. Data buyers are presented with a catalogue of information with a highly sophisticated search function, allowing them to quickly find your product at the time it suits their needs. Your sales team ends up with a more focused group of leads, freeing up time to maximise time with the most promising potential clients. Leverage our platform to help you reach the most promising customers.‍

Neudata has launched the Neudata Ranger product to address the needs of users and vendors in the traditional/market data space. For more information about Neudata Ranger you can request a demo.

About Neudata: Your trusted partner for data intelligence and insights

Neudata helps institutional investors, corporations and leading global organisations find the most relevant data sources to use in their internal data ingestion processes. Neudata offers a data research catalogue with objective and neutral assessments of alternative/traditional data vendors and datasets.

Neudata doesn’t buy or sell data, or require data providers to pay a revenue-share or commission in exchange for recommending their products to data buyers. That means users get unbiased intelligence that’s tailored to their specific research goals and strategies.

It also means Neudata is ideally placed to consult on data monetisation and help companies create new revenue streams in this field to future-proof their business in a tech-driven world.