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A regional, Tier 2 investment bank approached Expand to optimize its Market Data spend throughout all functions, including Capital Markets, Wealth & Asset Management and Support. The move came as Market Data was identified as an area of potential realizable savings following the appointment of a new COO.
Problems/Questions
The COO wanted a clear understanding of how the firm compared vis-a-vis peers with regards to premium terminal (Bloomberg and Reuters Eikon) consumption and Market Data spend per user across different functions. In addition, analysis highlighting the 'need to have' versus 'nice to have' products could help rationalize spend and improve the efficiency of resources currently employed in the Market Data team.
How Expand helped
Expand conducted a thorough review of the firm’s Market Data practice, starting with a complete mapping of the inventory and business lines. Expand was then able to accurately conduct like-for-like comparison, accounting for sizing differences between global and regional firms, both from a spend and user perspective, and niche products unique to firms in certain geographies.
By analyzing product consumption across all desks against a synthetic, rescaled benchmark, Expand was able to highlight the specific desks to be targeted in order to optimize spend to align with larger, more efficient players. Excessive product consumption and price points at the desk (e.g. FX level) provided clear, actionable intelligence for both business analysts dealing with the business on a daily basis, and for procurement professionals aiming to get the right data at the best possible price. Deep dives on specific desks and specific vendors produced a clear action plan for the team, and was used to strengthen arguments against push-back from front office users and also reduce back office costs.
In addition to product consumption and vendor analysis, Market Data human capital analysis highlighted the location footprint across peers with regard to high-, medium- and low-cost locations, as the contract type mix (employees/contractors/outsourced). Using key metrics and ratios, an optimum team size was presented, as well as the specific roles in which those resources should be employed.
Outcome
Expand presented the benchmark findings to the Market Data team and the Global COO and CIO in workshop-style sessions to gain a deeper understanding of the more qualitative aspects of the Market Data practice. Using the report, additional headcount has been sourced to rebalance the Market data team to help serve the business more effectively. In addition, cost saving opportunities have been highlighted to, not only reduce dual terminal consumption, but also to substitute expensive products for more cost-effective solutions.