Optimisation of market data management to avoid licensing risks
The brief
A leading German IT service provider obtains market data from external data suppliers and agencies. This mainly involves market information such as ratings, share prices and exchange rates as well as yield curves and market information from a wide range of stock exchanges. The data is received, processed and forwarded to the service provider’s affiliated customers and their systems.
The necessary processes for utilising market data are not currently mapped transparently and clearly. There is an increased risk of double licensing or licence gaps resulting in penalties, as purchasing is not carried out by a central department.
In order to ensure that all data is used in accordance with the contract in the event of an audit, we were commissioned to review all processes, structures and their data flows.
Our approach
In order to achieve this goal and gain an understanding of the overall situation, we believe that the project should be divided into two phases.
Phase I: Market data quick check / as-is analysis
- Current contracts are viewed, categorised and terms of use and user groups are identified
- The TOP3 contracts are analysed and evaluated in detail
- Market data flows are examined, authorisation systems and application log files are evaluated
- Conducting demand-defining interviews with users or application administrators and specialist departments
- Analysing the current market data processes, identifying weaknesses and missing structures
Phase II: Analysis & optimisation:
- Information obtained is analysed and a current risk and action profile is created
- Development of a new market data management process based on the information obtained
- Development of future roles and individual process flows
The solution and key benefits
Our two-phase analysis revealed not only an increased risk of possible additional claims in the form of penalties from individual data providers, but also serious under-licensing. By establishing clear processes and setting up a centralised market data management system, our client will be able to avoid these risks in future.
Market data management is a cross-divisional process with many interfaces for a wide variety of requirements, such as contract and licence management, requirements management, invoice controlling and compliance management. A further recommendation at this point in the project is the establishment of market data governance.
