What we have found from working with data consumers around the world is that the market data industry is at the beginning of a huge evolutionary shift. Cutting edge technology such as cloud, microservices, containers, and neutral platforms has financial data users excited about what may be possible. A future where consumers have a more cost-effective, flexible, and controlled access to data sources are the desires we need to cultivate. - Bill Bierds, President, BCC Group

The way that market data originates and flows from provider to consumer has changed dramatically over the years. The New York Stock & Exchange Board, the forerunner of today’s NYSE, was formed in 1817. Brokers gathered twice a day to trade a list of 30 stocks and bonds. From the podium the president called out the name of each security in turn, while the brokers shouted bids and offers from the chairs assigned to them.
Fast forward to the introduction of computers in the 1950s, which enabled the rate of trading to increase substantially from just over a billion shares traded during 1960 to over three billion in 1970.
Though there have been continued and dramatic changes in technology (the internet and high-speed data transmissions, for example), one thing that hasn’t changed is the desire for the market data producers (the exchanges or companies that own the exchanges or own the data) and the data consumers (banks and hedge funds, for example) to be directly connected.
Exchanges, trading venues, and consolidators still mostly provide leased lines for their streaming data. They sell data and the associated connectivity. Today, most banks and other data consumers connect physically to data providers through direct lines. They believe it’s the best way and, for many years, it was the only way.
These direct connections are beneficial in that they are fast and reliable; the downside is that they are expensive to install and maintain. Data consumers need to design their equipment internally to match the data as it comes from the data providers. The consumer’s infrastructure must be set up and maintained to conform to the provider’s API. Why should a small 10-employee hedge fund be required to have the same connection equipment and infrastructure cost and complexity as a large bank? Today, that is how the system works.

Cloud Computing Is
Transforming Financial Services
Cloud computing is significantly transforming the financial services landscape. The cloud is an evolving space that is becoming more accessible and attractive to market data providers and consumers. The data providers can sell their data on a larger scale via the internet into which the consumers can tap. Consumers no longer need their own leased line and can operate with minimal on-premises equipment to access the provider’s data in any cloud.
Market data consumers gain the ability to do better market distribution, control their entitlement more effectively, access additional providers (if desired), and connect to different sources simultaneously on the fly. There is no need to endure down time to figure out how to connect them.
Cloud computing enhances efficiency, agility, and security in financial services, enabling institutions to adapt to changing market dynamics and deliver better customer experiences. This is where BCC group fits into the picture. Thanks to the cloud and innovation seen over the past 10-15 years, it’s far easier for companies to set up equipment in the cloud and to deliver the low latency that is required for market data.
About BCC Group
BCC Group is a software house specialized in the development and delivery of high-quality software solutions for the financial services industry. Founded in 2001, headquartered in Frankfurt, Germany, they have two decades of experience working on the trading floors of the world’s largest financial institutions and over a decade of experience working in the private, public, and hybrid cloud. BCC Group’s core competence is the development of solutions based on financial market data feeds (Bloomberg, FactSet, ICE, IRESS, Refinitiv, Tradition, TP ICAP, Morningstar, etc.). Their key messages are:
Market data consumers are demanding neutrality to stimulate competition amongst market data providers. Prices are too high, and services levels need to improve.
Market data providers want to win clients with innovative technology, improved customer service while reducing delivery costs.
All financial data is moving to the cloud. The industry began with static and reference data, but real-time market data has started the migration.
A neutral platform running with cloud ready technology is the only way to achieve these goals.
In the next article we will drill into BCC Group’s flagship offering, the ONE Platform.
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