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By Tim Ferguson, 2 August 2007 09:05

NEWS

Financial organisations will increasingly turn to technology to cope with the wave of market data they have to deal with over the next few years.

The sector will be under pressure to have the correct infrastructure in place to deal with surging data volumes, according to a report from market analyst Datamonitor.

Read more about how MiFID is shaking up the financial industry

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♦  MiFID compliance - regulators in the spotlight
♦  Barclays Capital prepares as MiFID looms
♦  Banks gang up for MiFID reporting

The The Growing Significance of Market Data within Financial Markets report examines the technologies financial companies are bringing in - or planning to bring in - to cope.

Data volumes are doubling annually in the financial sector, with a yearly spend of $2.1bn on front office market data infrastructure from Europe and the US, and the report suggests the imminent arrival of regulations such as the Markets in Financial Instruments Directive (MiFID) in Europe, and the Regulation National Market System in the US, will be a major contributor to this.

The regulations - which come into force towards the end of the year - require financial service companies to record and retain trade data for five years and promote best execution for trades.

Amit Shah, financial services technology analyst with Datamonitor and author of the study, said the upcoming regulations have placed the importance of market data back on the strategic agenda.

The extra need to keep data will also see organisations invest heavily in storage tech, with spending in this area expected to peak in 2008.

Data quality should also be addressed, according to the report, and organisations are advised to look at the implementation of data cleansing systems to make sure market information remains reliable.