Combining its existing data & analytics subsidiaries has given Deutsche Börse a broad and powerful offering.
Dr Alireza Dorfard, head of Market Data + Services, and a member of Deutsche Börse Trading + Clearing management, tells Best Execution how the firm has built an award-winning data supply for buy- and sell-side firms.
How has the current market environment, with its increased focus on digitisation and data, influenced Deutsche Börse’s data offering this year?
Over the past few months, we have continued to expand our product portfolio, for example by adding new asset classes and by increasing our global coverage, through new data sources and collaborations, such as providing data from the leading digital asset data provider Kaiko, as well as data from Latin American markets. We have also enhanced our real-time data feed offering with a cloud-based solution for selected products, providing 24/7 flexible and user-friendly access to data directly from the exchange.
In a world where the only constant is change, it can be hard to get the focus right. How do you prioritise your group’s strategy?
It is very important for us to gain a better understanding of the challenges faced by our customers and their data needs, as new use cases require increasingly sophisticated products and services across a wide range of sources. Generally speaking, the influx of new customers, higher data volumes, and increasingly sophisticated demands have led us to tailor our offerings more and engage more deeply with the market and its participants.
Another trend is the growing importance of the cloudification of our data offering. The use of cloud feeds has significantly reduced time to market and improved accessibility. They are not yet replacing traditional real-time feeds, but it’s definitely of vital importance to be part of this development.
Digitisation is disrupting the trading environment and advanced analytics are at the forefront of that evolution. To what extent does this impact your offering?
The evolution of our data offering is closely linked to market activity. As mentioned before, we are seeing customers’ need to shift towards more sophisticated use cases, and our products have evolved accordingly. The competitive landscape has driven us to explore more diverse data sources and broaden the use of advanced models to make a difference – thus helping our clients to remain competitive.
In addition, different groups of customers have different needs: some require lower latency, while others want more analytical tools tailored to their specific activities. Our goal is to provide the highest quality data and the best tools to help all of our clients succeed in their diverse activities and the complex world of financial markets.
Geopolitical uncertainty, technological disruption and climate change are game changers, and their impact is witnessed daily by an increased volatility regime. How do you ensure a functioning infrastructure in the markets you operate?
Interestingly, the market share of participant groups has remained surprisingly stable over the past few years despite increased volatility. The performance of our systems is very critical, as volatility can result in several-fold increases in market data volumes over short periods. Which is why we continue to invest in our core technology and processes. Message rates which were only seen in short bursts are now observed over prolonged periods. In this environment our clients rely more than ever on high-performance, secure and reliable platforms.
When you look ahead, what can the market expect from you in the next year?
We expect the volume of data will continue to rapidly expand across asset classes and the buy-to-sell-side value chain. However, the signal- to-noise ratio may decline. Offsetting this trend will require utilising additional data sources – both traditional and non-traditional.
We also foresee continued pressure to consolidate currently fragmented data offerings
to the buy-side and the sell-side, including a growing importance of ecosystems, which is
why we are partnering with Google to develop state-of-the-art data sharing and distribution capabilities, for both external and internal users. The idea behind this is to connect the various data domains across Deutsche Börse Group in a secure multi cloud environment, including on-premises for critical applications, for accelerating data commercialisation and to develop the tools for opening up to third parties including ‘bring your own data’ which will allow our clients to combine data from various sources on one platform.
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