The Johannesburg Stock Exchange (JSE) is the latest to unveil a new data service as it works to keep up with incumbent exchanges and industry trends, completing the first phase of its market data modernisation strategy and creating a centralised, cloud-based marketplace for its data products and services in partnership with DataBP.
Data continues to be a key profit generator for exchanges, with recent estimates from Morgan Stanley Research suggesting that data and analytics makes up two-thirds of LSEG’s overall revenue. In contrast, post trade and fixed income account for just 14% and 15%, respectively.
While not quite to the same degree, the value of data is also clear at Deutsche Borse and Euronext. Morgan Stanley Research estimates that the exchanges receive 23% and 22% of revenue from their data and analytics offerings.
“Exchanges the world over are looking to their data businesses to bolster their revenue as pressure on trading revenue continues,” Mark Randall, director of information services at the JSE, told Global Trading. “There are tier one exchanges that have data shops. This platform enables us to give JSE clients a world class client experience that they are accustomed to from other global exchanges, which is a big step for us on the tip of Africa.”
The JSE’s information services division contributed 15.5% to JSE group revenue, according to 2023 year-end financial statements.
Using DataBP’s financial data management platform, the JSE will be able to simplify client onboarding, streamline product development and automate data access entitlements and billing processes, it said. Clients will benefit from access to a wide range of products and the ability to enhance JSE data – both real-time and historical – through third-party content and analytics services.
Randall commented: “Migrating data offerings to the cloud is a key part of JSE’s ICT strategy. It not only reduces infrastructure costs but also increases flexibility.”
Mark Schaedel, CEO of DataBP, told Global Trading that exchanges’ interest in building out their data services should not come as a surprise. “I think exchanges are essentially price formation platforms, and that price is used not just by those who interact from that platform, but many others. So to me it seems like a natural evolution for exchanges to become data providers first, and for their businesses to become data-centric,” he said.
“Exchanges have recognised that their data is a valuable asset and product, that even those who don’t trade on their platform benefit from it, and that there will be demand for it to inform other types of events, valuation of assets, routing decisions, trading decisions, and to navigate capital markets.”
The JSE has previously partnered with big xyt to develop Trade Explorer, which allows trading venues to distribute data analytics solutions to clients in their ecosystems. This service, delivered by big xyt, has now been made available on the new platform along with digitised client contracting for index agreements.
Looking ahead, the exchange plans to release a virtual storefront where clients can purchase data online. “Ultimately, the JSE aims to leverage cloud services to provide clients with analytics and insights, rather than just raw data,” Randall said.
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