Introducing a Common Data Layer for Financial Markets | The Financial Technologist

5 Minutes

In financial markets, trading data is generated and held in the many trading pipes, executio...

In financial markets, trading data is generated and held in the many trading pipes, execution management systems, and by banks or brokers used for execution. This results in multiple unconnected copies of incomplete trading data and a general lack of visibility, consistency, and accuracy. As financial markets increasingly rely on data and technology to operate, these industry-wide data siloes have become problematic - hindering the flow of information, and making it difficult to analyse, which leads to inefficient decision-making. Bringing Open Banking to Financial Markets Inspired by the rise of open banking data APIs in consumer banking, we have taken this concept and applied it to data analytics in financial markets. Open banking is the term used to describe the use of APIs that allow third-party providers to access banking and financial data securely. The concept increases competition and innovation in the banking industry and provides customers with more choice and control over their financial data. In financial markets, Tradefeedr has built data connectivity to all the major banks and trading platforms so that buy-side clients can securely access and independently analyse of all their trading data regardless of where and how they traded. This allows firms to make better informed decisions, while also providing more control over their data. Advances in technology Developing our common data layer has only been possible due to advances in technology over the past three years, combined with a huge reduction in the cost of tick databases. Additionally, cloud adoption enables low-cost tools to deliver sophisticated analytics to clients analysing their trading data. Benefits for all Tradefeedr launched with FX, where fragmentation and data siloes are major issues. When we were building our common data layer, we ensured that there were benefits for all parties – to encourage adoption. Clients are provided with free access to their data and pre-built analytics, Liquidity Providers use the same data, in the same format, to enable a dialogue with clients, and venues/ECNs no longer need to develop their own bespoke analytics (which only showed the data where clients traded on their venue). Our mission is to make data more accessible and useful for the people who need it most, and by applying the concept of open banking to financial markets, the buy-side, sell-side and trading venues benefit from a more transparent and efficient data process. This new approach has the potential to transform financial markets, providing greater transparency, easier access to trading data and better decision-making tools for all. Having proved that a common data layer works in FX we are looking to extend services to include multi-asset coverage. You can read Balraj's article and further industry insights in the latest edition of The Financial Technologist. Download your free copy here.
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