Total spending on financial market data and cloud-based software continued its decade-long growth trend in the second quarter of 2022. A new report from TradeAlgo estimates total financial data spending will surpass $37 billion in 2022, marking a new record.
Real-time data is dominated by Bloomberg with over one-third of the total market share. Fintech upstarts like TradeAlgo and global players like IRESS, IHS Markit, Refinitiv and S&P Global have contributed to a record $35.6 billion in 2021.
“Bloomberg ranks 1st in global revenue in all user groups we tracked,” says Jon Stone, founder of TradeAlgo. “We seek to serve the 100+ million users who can’t afford to pay tens of thousands per year for high quality, low latency market data and algorithms.”
“We hear from underserved people every day that they wish they had access to the same kind of data that hedge funds on Wall Street have,” added Stone.
Post pandemic growth has been consistent across all global regions TradeAlgo tracked, with market data spending in the Americas increasing by approximately 8.2% in 2021, outpacing the 6.7% rate in Europe and 6.6% in Asia.
The United States leads market data spending with 55.1% of the global’s total number. Europe and Asia accounted for 26.2% and 18.7% of the total, respectively.
The investing landscape has changed radically as retail investors’ power and influence grew exponentially and showed no signs of abating. “Public companies can no longer operate under the former conventional wisdom that retail investors have no impact,” noted a report by S&P Global.
Public participation in the market remains higher than it was prior to the pandemic, which has contributed to TradeAlgo’s forecast of $37 billion in global market data spending by 2022.
TradeAlgo combines cost-saving engineering innovations with access to institutional-grade data APIs to help both seasoned investors and novices make better, more informed decisions.
“Access to data isn’t just valuable for investors, it’s indispensable. Today’s high-frequency-driven trading environment, enhanced by artificial intelligence and Virtual Reality, continues to infiltrate our markets. TradeAlgo seeks to open up these emerging technologies for everyone to accelerate transparency and fair markets for all,” said Mr. Stone.
Although the industry demand is expected to reach new heights this year and surpass $37B, many traders surveyed expect traditional market data providers to face greater threats from incumbents and blockchains.
In a recent TradeAlgo survey, 50% of respondents said the biggest challenge facing market data providers in the next two years will be adapting to the growing popularity of data platforms, cloud marketplaces, and third-party application suites.
With scalable cloud-based solutions, underserved customers are able to consume and purchase data more conveniently while at the same time maintaining fewer direct vendor relationships, which respondents believe will force legacy vendors like Bloomberg, Refinitiv and others to adapt.