1999 Market Data Survey

1999 Survey Identifies Leading Data

The 1999 Data Management Survey was once again segmented based upon delivery method: Bulk Delivery of Data and Online Access to the vendor's database. The three sections covered by the survey (Pricing, Announcement of Data, and Factors Data) also remained the same, as did the number and variety of instruments and data categories evaluated within them. Under the Pricing section, eight instruments were evaluated while two instruments were studied for Factors and six information categories evaluated for Announcements. In all, each section category (coverage, accuracy and reliability of data delivery) consisted of 16 sections or instrument categories.

Evaluation Of Bulk Data Vendors
This results of this year's survey proved to be more stable than the last as 27, or over 50%, of category leaders were able to retain their leadership position in categories that they had won the year before. In the Reliability section, 12 of 16 instrument categories featured repeat winners, while the Accuracy section featured nine. The Coverage section, however, featured considerable turnover as ten new category leaders emerged.

The number of bulk category section leaders in this year's survey rated as being only "Adequate" (numerically represented by a score between 3 and 4) jumped from six in last year's survey to ten in this year's, reversing a trend that saw a steady strengthening in the score level of category leaders. Overall, however, the average scores of category leaders in the Coverage, Accuracy and Reliability sections remained fairly consistent. In general, international securities data categories lagged behind all others, although Xcitek's leading ratings for international corporate actions categories were in-line with the section averages.

Category Summary
The Coverage of Data section featured the widest array of category winners as ten different vendors earned top honors. Xcitek earned the most category awards, finishing first in four out of a possible 16 instrument segments. Bloomberg followed closely behind with three first place finishes while Reuters and Bridge both earned top honors in two categories. In total, nine different vendors earned a leading position in the Coverage section.

The Accuracy of Data section also featured a varied selection of first place finishers. In total, nine different vendors earned a leading position in the Accuracy section. Xcitek paced the section with four victories while Bloomberg finished first in three categories. Interactive Data, Merrill Lynch and Bridge each scored highest in two categories. Valorinform, Reuters and Telekurs also each earned one first place finish.

Interactive Data once again was the big winner in the Reliability of Delivery category, earning six first place honors including four repeat victories. The accomplishment marked the third straight year that Interactive Data has swept the North American Corporate, North American Government, MBS and ABS & CMO pricing categories. Xcitek came next with four first place finishes followed by Reuters and Bridge, each of whom earned top honors in two categories. Three other vendors ranked first in one category, including JJ Kenny which won the Municipal Bond pricing category for the third straight year.

Bulk Data Pricing
The Bulk Pricing section featured seven different vendors who earned top honors. Because there were three category ties, a total of 27 awards were available.

Interactive Data retained its status as the most dominant vendor in the Pricing section, capturing top honors in 9 categories, including six in the reliability cross section. Interactive Data's accomplishment marked the third straight year that the vendor earned the most top honors for Pricing. Interactive Data was able to maintain its leadership position in five of the 11 categories it had won last year and performed particularly well in government agency, corporate and asset-backed debt. Although it relinquished its industry lead in six other categories, the vendor was able to claim four new first place slots.

A new comer to the Bulk Pricing section was Bloomberg. The vendor was rated as the top provider in six section categories including Coverage and Accuracy for North American Equities and Mortgage Backed Securities.

Reuters one again exhibited its strength in International Equities, ranking highest in all three categories. Reuters also ranked first in Coverage of North American Government agencies and Reliability of North American Equities, giving the vendor five first place finishes.

JJ Kenny, which once led in all three Municipal Fixed Income categories, earned top honors in three categories.

Finally, Telekurs scored well in all International segments and retained its leadership position for Coverage and Accuracy in Fixed Income pricing.

Other category leaders included Merrill Lynch and Muller Data. Both vendors garnered a share of the lead for Accuracy in the North American Government Agencies category.

Bulk Data Announcements
Unlike last year when it had the greatest variety of vendors taking top honors, this year's Announcement section featured only four first place finishers. Also unlike last year, the section was far more stable as ten categories featured repeat winners. However, all ten repeats were represented by Xcitek, which in addition to maintaining all ten of its category leads from last year, was also able to add victories in Coverage of International Equities and Fixed Income to its crown.

Following in Xcitek's wake were Valorinform and Merrill Lynch, both of which earned top honors in three categories, and Muller Data, which earned one first place finish.

Bulk Data Factors
All of the top honors in the Bulk Data section were awarded to Bridge. The vendor exhibited an impressive showing by sweeping all categories for Asset Backed Securities and CMOs and Mortgage Backed Securities.

Evaluation of Online Data Vendors
For the first time in the history of the Data Management Survey, this year's results revealed a true battle for the claim of top online vendor. In the past, the section had been almost completely dominated by Bloomberg. Two years ago, Bloomberg enjoyed well over half of all first places awards for the coverage, accuracy and reliability of online data. However, after winning over one third of all categories in 1998, Bloomberg finally relinquished its position as the most decorated online data provider. And yet, Bloomberg still posted an impressive showing by taking top honors in 13 categories and finish among the leaders in many others. This year's top online award winner was Xcitek. The vendor was able to parlay its growing strength in Announcement Data to earn 14 first place finishes. Meanwhile, not too far behind was Interactive Data, which completed the online categories triumvirate of online data leaders by winning top honors in 11 different categories.

As in past year's surveys, the Online section featured a more concentrated core of vendors earning top honors. Only seven vendors were so awarded, whereas ten vendors lead at least one Bulk category.

In another unprecedented result from this year's survey, no online category leaders were related below "Good" (a numerical rating of 4.0 to 5.0). Last year, seven top online vendors only received an "Adequate" rating.

Yet another reversal from last year involved the lack of turnover in online category winners. Whereas last year fewer than 40% of vendors who were able to repeat, over 66% of category leaders were able retained their top position from last year.

Category Summary
In the Coverage of Data section, Bloomberg won six awards, including three that it won for the third year in a row. Xcitek followed next with five victories, while JJ Kenny and Reuters each recorded two first place finishes.

Interactive Data claimed the most first place finishes in the Accuracy of Data section by claiming top honors in five categories, followed by Xcitek with four first place finishes and Bloomberg with three. Reuters earned top honors in two categories, while Standard & Poors, JJ Kenny and Valorinform each claimed one category victory.

In the Reliability of Delivery category, Interactive Data and Xcitek finished tied for most victories with five first place finishes apiece. Bloomberg trailed close behind with four category victories, while Reuters, JJ Kenny and Standard & Poors each lead one category.

Online Pricing
After relinquishing its lead to Interactive Data, Bloomberg reclaimed its status as the most awarded vendor in the Pricing section. However, its nine victories were the lowest total for a Pricing section leader in the history of the survey. Interactive Data claimed seven category victories of its own. As was the case last year, Interactive Data and Bloomberg were also the most frequent second place finishers in many of the pricing categories.

Reuters and JJ Kenny also fared well in the Pricing section, earning five and four first place finishes, respectively. Reuters showing included a sweep of the International Equity category. JJ Kenny was able to match the feat by scoring a sweep of its own in the North American Municipal Bond category.

Similar to last year, Interactive Data, Bloomberg, Reuters and JJ Kenny were the only vendors to finish atop an online Pricing category.

Online Announcements
This year's Online Announcements section was once again dominated by Xcitek, which ranked highest in fifteen categories, including sweeps of four corporate actions categories. In total, Xcitek claimed victory in 14 of 18 section categories.

The only other vendors to claim more than one category victory in the section was Standard & Poor's, which claimed top honors for Coverage and Reliability of North American Dividend and Interest Notices. Bloomberg and Valorinform each recorded one victory each.

Although it failed to earn top honors in any section category, Interactive Data still performed very well, walking away with 12 second place finishes.

Online Factors
Bloomberg and Interactive Data split top honors in the Factors section. Bloomberg swept all three categories for MBS Factors, while Interactive Data ranked second in all three categories.

Conversely, Interactive Data swept all three categories for ABS & CMO Factors, while Bloomberg ranked second in all three categories.

Survey Continues to Track Vendors

For the ninth consecutive year, Securities Operations Forum and The Summit Group have conducted its annual Data Management Survey and compiled a comprehensive report on the quality of the industry's data providers.

The mission of the Data Management Survey continues to be twofold: to identify and define the underlying trends influencing the way in which financial information vendors provide their services, and to serve as a progress report on how well financial information providers are performing in meeting their clients' expectations.

This year's survey also attempts to gauge for the first time the extent to which the Internet is being used as a source for securities data. Also, because the ninth edition of the Data Management Survey represented the fourth time that on-line data services were rated, the data included in that section was more comprehensive.

How The Survey Was Conducted
This year's survey was organized and distributed very much like the 1998 survey. It was mailed to over 3,000 operations professionals in brokerage firms, commercial, trust and custody banks, custodians, mutual funds, money managers and institutions with asset sizes ranging from under $1 billion to over $25 billion.

There were no major additions to the survey as consistency was stressed.

Vendors were rated on a traditional Likert Scale, with "5" being excellent and "1" meaning very poor, in three categories: Coverage of Data, Accuracy of Data and Reliability of Delivery. Each vendor was also individually scored in a comprehensive customer service section. There are now over 100 distinct categories of measurement in the survey.

While most of the vendors tracked by the survey were also included in this year's report, increasing consolidation in the industry reduced the number of data vendors examined from 15 to 13. The most significant merger/acquisition in the industry was Interactive Data's acquisition of Muller Data. In spite of this combination, each vendor was listed separately to reflect each entities' distinct offerings during the period of the survey.

Customer Service
Overall, this year's survey reflected a continuing decline in customer service trends in all bulk categories, as well as a noticeable decline in on-line categories. Last year, on-line categories realized an across the board increase. It remains to be seen if this decline resulted from rising expectations or declining service. A comparison of the bulk and on-line data results for 1997, 1998 and 1999 begins on page 8.

In addition to determining the users' perspectives on the vendors' coverage, accuracy and reliability of data, the survey asked several questions dealing with customer service.

The questions covered the vendor's use of technology, knowledge of their product and the data, whether issues are promptly addressed, and the overall level of customer service. Each vendor was rated on the same 1 to 5 scale used for the instrument portion of the survey.

Last year, in the combined customer service section, Bloomberg won two categories, while Xcitek won three. This year, Xcitek won all five customer service categories. The results of the overall customer service section of the survey are displayed on page 17.

The only addition to this year's survey involved the inclusion of an Internet related question. Respondents were asked to define the extent to which they retrieve securities data over the Internet as well as identify the type of data that is accessed (see page 12).

Survey Profile
Over 54% of respondents indicated that the asset size of their organization was greater than $25 billion and over 43% stated that over 5,000 accounts were affected by the data that they received. Greater than 58% of respondents stated that there were over 10,000 securities listed in their firm's database.

Banks were the largest respondent by type of organization, representing approximately 31% of all survey responses, followed by mutual funds (17%) and brokerage firms (15%). Other participants included institutional investors, money managers, pension funds, vendors and insurance companies.

Also, over 78% of survey respondents were from the managerial ranks. Also, nearly 77% reported that they deal with Pricing and Announcement information on a daily basis.

Bulk Data trends

Bulk Data - Coverage of Data
In the Coverage section, only six of 16 vendors repeated as winners in categories that they had won in 1998. This category turnover yielded ten distinct winners, the most varied of all sections. Xcitek posted the most Bulk Coverage awards by scoring highest in all four corporate actions related categories. Other multiple winners included Bloomberg, which earned top honors in three Pricing categories, and Reuters and Bridge, both of which scored two first place finishes. Bridge's victories came in both Factors categories, while Reuters finished first for Pricing of North American Government Agency issues and International Equities.

Bulk Data - Accuracy of Data
Leadership in the Accuracy section was more stable as nine of 16 vendors were repeat category leaders. Xcitek lead the way with four victories, followed by Bloomberg with three victories. Merrill Lynch, Bridge and Interactive Data each won two categories. Four other vendors also earned top honors in one category.

Bulk Data - Reliability of Delivery
Leadership in the Reliability section was the most consolidated, as only seven different vendors earned top honors. The section also featured the most repeat winners. Twelve of the 16 categories winners were repeat victors, led by Interactive Data and Xcitek. Both vendors retained their leadership in four distinct categories. Interactive Data also added an additional two category leads. Reuters and Bridge also both scored two first place finishes.

On-Line Data Trends

On-Line Data - Coverage of Data
Leadership in the Online Coverage section was the most select of all survey sections: only 5 vendors were able to attain top honors. The section also featured nine of 16 repeat as winners (four each for Bloomberg and Xcitek). In total, Bloomberg led the way in the section with five category wins while Xcitek followed closely with five. The section also featured many three and four year repeat winners, including Reuters, which in addition to its first victory in Pricing for International Fixed Income, also scored its fourth straight victory for International Equities.

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