Celent estimates there will be a total of USD1.2bn in wealth management market data spending by the end of 2010, an increase of five per cent from 2009.
In a report, Market Data Needs for the Wealth Management Industry, Celent provides an overview of the needs and uses of market data in wealth management.
Market data feeds and software are key tools for firms to increase efficiency, make secure investment decisions, comply with regulatory issues, use in long-term wealth planning and account management, develop new business leads or generate ideas, and facilitate customer communication.
The study found that market data providers are moving beyond the traditional concept of data provision to include more advanced features like analytical tools and charting.
The market data terminal is slowly fading. Web-based adviser dashboards allow for lower-cost deployments, maintenance, and quicker updates.
Different regions are at different levels of maturity with regards to market data: North America and Europe are more mature, while the Asian wealth management market is not as sophisticated.
While firms face the challenges of budget constraints in the aftermath of the financial crisis, heightened regulatory requirements ask for better systems to improve and address all compliance issues.
"There is increasing pressure on financial institutions to reduce their market data spending and ensure the entire firm is efficiently utilizing market data. However, there seems to be a general consensus that there will be an increase in overall spending on market data in the next two to three years. Spending on market data technology will focus on customised end user-driven requirements," says Isabella Fonseca, senior analyst and co-author of the report.