Asset manager reduces market data spending by 40%
Client
A large investment manager with over 90,000 unique security master instruments between their held portfolios and associated benchmarks.
Business Situation
The client was seeking to adopt a new security analytics engine which required them to identify a market data source with comprehensive coverage of their universe of securities across their portfolios and associated benchmarks. To accommodate a consistent data source for portfolios and benchmarks, the change would increase their security universe from 20,000 to 90,000 securities. With a bias toward a specific vendor, the client planned to leverage their existing license and protocol to perform ad hoc data requests which are charged on a per request basis. The proposed solution was cost prohibitive due to the variable cost structure that would quadruple their market data spend.
Grandview’s Role
Grandview collaborated with the client’s vendor representative to identify alternate methods of retrieving the required data. The vendor recently began to offer a new data service that followed a new pricing structure. Grandview developed a financial model based on actual data security types and data categories to compare the existing contract to projected costs under the new contract terms. The model was used to guide the long-term direction of the project and identified an immediate opportunity for cost savings.
Results
Gained stakeholder buy-in from the client’s vendor management, data integrity, and I.T. teams to adopt the new license and messaging protocol.
Achieved an immediate 40% cost savings based on current data volume.
Eliminated an additional $400,000 cost per year by identifying and removing three data elements from the daily request process.
Saved an additional $300,000 per year by centralizing data requests across five enterprise licenses.
Avoided a projected incremental cost of $1.3 million per year based on fully ramped data volumes by switching from a variable to semi-fixed pricing structure.
Provided detailed business logic and technical specifications to the Client’s I.T. team to build an internal application that accurately projected vendor invoice amounts based on actual and expected data usage. The tool was adopted and is now being used for ongoing expense monitoring and budget planning.
