Tickers, jitters and big hitters.

Is the world of financial data being shaken up?

As we have previously written, financial markets are not new users of alternative datasets, which have provided a useful way of gaining a unique and differentiated view of companies.

However, the stakes have been raised significantly since the Covid pandemic hit, with major institutions like Stock Exchanges sniffing an opportunity to align themselves with the future growth of the sector and also compete with the traditional guardians of data like Bloomberg. The London Stock Exchange's $27bn acquisition of financial data company Refinitiv is a strong example as is Nasdaq's $2.8bn acquisition of Verafin. Deutsche Borse has also expressed an interest in indices, analytics and ESG data plays.

These longstanding institutions have realised that their strong reputations and relationships will not be enough for them to prosper in the an increasingly data driven world, and we can expect to see further consolidation along the way as the battleground intensifies.

Large financial data players, banks and exchanges are all very much aware that their position in the vast capital markets advisory space is under threat, not just from new data and analytics players nipping at their heels but also the increased interest that Big Tech players have in the field. Big names like Google and Amazon have had surprisingly little impact on financial markets so far but, according to a World Economic Forum report, these giants are simply biding their time before wading in and leveraging their cloud computing, AI and big data capabilities. The highly regulated nature of the financial sector is likely to have help them back somewhat so far, but compliance is an area that Big Tech is becoming increasingly comfortable with.

In summary, we can expect to see an intensification in the financial markets data space, with incumbents rushing to defend their positions, increasing VC investment, growing consolidation and the growing involvement, likely through acquisition, of the largest tech companies.