Nasdaq Leverages the Cloud for Data Delivery05.05.2020 By John D'Antona
When it comes to market data provision, there appears to be no better way to deliver the lifeblood of the markets than the Cloud. The Cloud is fundamentally reshaping the distribution, consumption, management and analysis of market data, which has become a bigger part of serving the markets than trading services. The convergence of big data, cloud capabilities and rise of mobile platforms has created the opportunity to meet investors or firms where they are. This means that all manner of financial firms, from small fintech firms and entrepreneurs to the larger, more traditional players, can be served seamlessly. This has pushed Cloud adoption to advance at a rapid pace.
According to recent data from Greenwich Associates, 93 percent of market data professionals plan to use the Cloud to manage their data needs. Of that 93 percent, more than half said there was a “very high” probability of usage while only one percent reported a “very low” chance.
Usage of the Cloud has obvious benefits. First, data is much more accessible wherever one is located. Secondly, the Cloud does not have the size limitation that a physical server or computer memory bank does – it is theoretically boundless – hence offering virtually unlimited capacity at a fraction of the cost. And as the demand for new and more esoteric information grows, a place to store it that is easily accessible becomes essential.
The Cloud fits the bill. Greenwich noted that one-third of buy-side trading desks’ technology budgets are spent on market data desktop application, compared to only 12% on direct data feeds. This is in part because the firms often have a heavy burden in setting up the hardware needed to take these feeds. The cloud does away with a lot of that baked-in spending.
In this vein, Nasdaq just announced the launch of its Nasdaq Cloud Data Service (NCDS), which provides clients access to real-time equity, index, and fund data through cloud-based technology. Nasdaq, a data and technology partner to a multitude of companies, sees moving to the cloud as a logical next step in evolving to meet client needs.
NCDS is accessible through a suite of highly scalable, cloud-based Application Programming Interfaces (APIs). These APIs utilize open-source delivery standards and a software development kit (SDK) to fast track engineering efforts. This eliminates the need for hardware procurement, proprietary protocols, file formats, and leased lines, and allows for effortless integration of data from disparate sources. This equates to a big reduction in time to market for customers. NCDS currently runs on the Amazon Web Services (AWS) Cloud but is cloud agnostic, capable of being used with any cloud provider.
“Taking market data from the cloud makes our customers faster and more agile. This increases the options we can offer clients, and we can get them online in hours or days instead of weeks or months,” explained Lauren Dillard, EVP and Head of Global Information Services, Nasdaq.
The NCDS offering was created to deliver lower latency and higher performance for entrepreneurs, fintech firms and traditional financial services applications. NCDS allows users to connect to a variety of data products in real time.
And just recently, MT Newswires announced its global, real-time multi-asset class capital market and economic news services are now available to clients via the Nasdaq Cloud Data Service API.
The last several years have seen a tremendous shift away from building new trading technology and systems in-house to outsourcing via specialty vendors. For example, Greenwich research shows that over 90% of buy side firms now look to a third party for their execution management system.
Fintech providers have spent over two decades simplifying customization, removing the burden of maintenance from their users and, more recently, deploying applications via the cloud eliminating the need for local installations and on-premises hardware. Movement away from in-house to outsourced cloud deployed applications further makes the Cloud-based market data an even better value proposition.
Spencer Mindlin, capital markets analyst at Aite Group, said data and technology services is an important part of Nasdaq’s business and their customers are increasingly moving to the cloud. So, it’s smart that Nasdaq is making its data as easily available as possible.
“The amount of data that financial services firms will need to collect, produce, analyze, and store will undoubtedly continue to increase exponentially. And the value propositions of the cloud are driving any almost all new applications, migrations, and deployments to it,” Mindlin said. “So, it only makes sense that the data will need to be available in the cloud as well.”
The partnership expedites implementations, improves data access, and increases operational efficiency.
Quant researchers are freed from the burden of managing data infrastructure.
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The partnership will enable mutual customers to easily access B-PIPE market data.
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