July 5, 2026 | Charles Ashwanden, Co-Founder & CEO
Over the last few weeks, I've written about a number of different aspects of market data management: cost, governance, and process. Whilst we tend to see these as separate issues that the financial services industry is facing, they all overlap closely and are symptons of the same problem.
Most firms have a visibility problem.
After spending years working alongside and through market data teams, I've noticed something that rarely changes. If you ask almost anyone how much they spend on market data, there’s a high chance that they will give you a number or a range. But if you were to ask where every dollar goes, who uses each of the services, why they use it, what they use it for, what value it provides, what the data can be used for contractually, what alternatives there are, or how much leverage the team might have at renewal time, they would be challenged.
This isn’t because the information doesn’t exist or the team isn’t capable of finding answers, it’s far more likely that the information is spread across numerous internal and external systems, often siloed or kept in file structures that are not easy to navigate or easy to use which means that when you need the information the Market Data team have to hunt it down, typically requesting files from Accounts, Legal, HR, Business teams and Procurement.
Market data and Procurement teams generally do an incredible job of pulling this type of information together for the leadership team upon demand or when they have a ‘code-red’ contract renewal moment, and they generally know where all the proverbial bodies are buried, but no one could claim that sourcing, validating and providing vendor and contract intelligence is ‘pretty’, straightforward or without considerable risk.
The nagging doubt that many a Head of Market Data has secretly expressed to me, is that they have missed something big and it is going to land in their lap on Monday morning or a Friday afternoon – be that a major benchmark audit notification, a high value auto-renewal missed for a long gone team, or just a wave of the normal day to day users requests overwhelming the team's ability to get ahead or on top of what's coming down the pipe.
On average, we see small-mid sized firms spending circa $10M on data and applications losing somewhere in the region of $1.5-$2.5m of avoidable annual spend in 1 form or another every year. Be that unnecessary/unused or duplicative licenses, missed cancellations, a lack of contract intelligence reducing negotiating intelligence, or the unseen audit risk breach costs.
Few, if any, of these costs exist because someone made a bad decision. The chances are that they exist simply because nobody has enough information to hand to make a different one. Without the correct data and insights, who in their right minds is going to take a swing at something that could expose them so significantly?
Quite understandable really. If you remove the wrong service, interrupt a trading desk or create a rogue compliance issue; the consequences are immediate and can be terminal. Which is why, in many cases, leaving the ‘sleeping bear’ often feels like the safest option, even when everyone suspects there are savings to be made.
Unfortunately, the requirements for firms to maintain better records for every aspect of their operations are increasing. With vendor audits becoming more commonplace, regulations such as DORA and the robustness of the supplier network and operational resilience being a standard part of many Institutional DDQ’s times, and Market Data expectations with it, are changing.
A recent Swedish Public Authority stated that 75% of their decision weighting around the management of more than $150Bn in external investment management services would be based not on performance, but on the checks, balances and governance of process and operations. Yet many financial service firms submitting to this RFP are still managing thousands of contracts across hundreds of vendors using spreadsheets, shared drives, team inboxes, and individual knowledge.
When an audit arrives, or evidence is called for, the business focus changes. Firms pause their day to day simply to focus on locating and compiling all of the data that is needed to support their governance capabilities, finding contracts, confirming entitlements, documenting use cases, identifying possible breaches, and answering vendor questions all at a point in time and that's an expensive way to discover where your information lives.
The encouraging part is that solving these problems doesn't usually require more or different people, it requires better, more thorough process. When contract information, subscriptions, users, use-cases, vendor intelligence and renewal specifics are connected in one place, the whole business spends less time searching for information and more time making proactive decisions. Market Data and Procurement teams negotiate from positions of strength. They are always ready for the next audit, they understand their user patterns as they change and they’ve identified opportunities before renewal that put them in a better place to negotiate with a stronger hand and become strategic advisors within the firm.
There's no doubt in my mind that this is where the industry is heading. For many firms, Market data is seen as a significant operational expense. Only within a minority of firms is the function seen as additive by senior leadership.
At Sidelight, we are doing all we can to help change this view, not just by supporting the existing status quo, but through innovation solutions that provide a framework to help firms reduce risk, add value, and lower costs in their external vendor relations.
Firms that have a complete 360 degree understanding of their data estate are able to make better commercial decisions and adopt new technologies and data faster and with far more confidence than those still relying on fragmented information. If there's one idea running through everything I've written recently, it's this: visibility changes behaviour.
It’s the old adage really; you can only manage what you monitor, and once you understand what you license, what you're paying for, how it's being used, and where your risks sit, better decisions become surprisingly more straightforward. In my experience, that's where meaningful change starts.