Brokers Up their Data Game to Deliver on Quantity, Quality, and Accuracy

In the contemporary world, the ever-increasing availability of data and sophisticated analytics has reshaped the way business is done. We understand that access to data, delivered in a timely fashion and in a format that facilitates analysis, promotes valuable insights that can reduce costs, improve efficiency, enhance client satisfaction, and ultimately grow revenue. In financial services, many business functions depend on data. When reports are not delivered on time, it can impact crucial operations or transactions. Accuracy is also mission-critical. Mistakes cost money and erode confidence in data sources and suppliers, which can have a long-term impact on how effectively firms leverage reporting and analytical capabilities. Consequently, clients are making ever-increasing demands regarding data provision.

The COVID-19 pandemic has forced businesses to make dramatic changes. The widespread adoption of remote work and the implications for collaboration, data security, efficiency, and productivity have presented brokers with new challenges. Clients are no longer sharing the same space, and they need more time to collaborate and make decisions. Rapid delivery of accurate data aids the decision-making process and builds trust, which is an essential component of efficiency.

Brokers Rise to the Occasion

From our view, most brokers have responded admirably to the rising demand for high-quality and accurate data delivered on an expedited basis. Anecdotally, data delivery times have been steadily decreasing. While we’ve seen temporary stresses to the system over the last year when brokers were giving less timely and accurate data, for the most part, all is well.

Brokers aren’t in the data delivery business, but providing the data that clients need, quickly and rapidly, is an important point of differentiation in the competitive landscape. By making significant investments into core data solutions rather than crafting bespoke client data programs, brokers can expand their support footprints while reducing costs and growing revenue. By collaborating closely with data management firms, including SaaS-based solutions, they can share in the data process and expand beyond the traditional legacy broker role.

Analyzing Trade Matching Performance

When brokers provide better data to their clients, it’s an important part of becoming more accountable for their performance. Making a trade is only the first step in a chain of activities and the post-trade process is critical. When reconciliation, clearing, and settlement don’t go smoothly, trades fail, engendering both financial and reputational risk for a firm. Even the best traders make mistakes, and small mistakes can spawn big liabilities, particularly for firms engaging in high frequency, computer-based trading. When trades aren’t booked or allocated appropriately, it can create issues with margins, for example. Trade breaks can increase exposure to market risk. Errors also have the potential to set compliance mechanisms in motion, and no wants that. Whether a firm is large or small, counterparties and clients expect a process that is free from errors.

Our Trade Match analysis enhances control over individuals as well as over the post-trade process, and firms can work with our solution to get reports within the timeframes that best meet their requirements. Some brokers want match information as close to real-time as possible, while others may want daily reports. When patterns emerge, our matching percentages make it possible to compare brokers and individual trading desks.

The speed at which firms receive matching data directly impacts the speed at which trade breaks can be investigated and resolved. Trade breaks, that once took days to resolve, can now be dealt with within minutes. In all of these cases, applying sophisticated analysis, like those provided by Theorem, generates results that can make brokers and traders more accountable for their performance.

By leveraging data and analytics, firms find new ways to enhance customer service

Advanced data flow and processing are also crucial for timely and secure account opening and client onboarding. Comprehensive and accurate data minimize compliance risks, including those resulting from Know Your Customer (KYC) protocols. Ingesting accurate data from public record databases, watchlists, and other sources are necessary to verify client identity and source of funds. Anti-Money Laundering (AML) and Customer Due Diligence (CDD) are critical processes that fall under KYC and rely heavily on streaming accurate data flows. Additionally, accurate data allows many firms to automate their onboarding solutions to streamline operations and get accounts and sub-accounts opened quickly and in compliance with regulatory standards.

Financial services is a data-heavy business, and the delivery of accurate data when it’s needed and in a format that facilitates analysis will continue to rise in importance. In choosing data providers, careful due diligence regarding performance and quality is essential to ensure the best outcomes for financial firms and their clients.


About the Author

Rebecca Baldridge, CFA, is an investment professional and financial writer with more than 20 years of experience in creating content and research for asset managers, investment banks, brokers and other financial services clients. She’s worked for some of the biggest names in the industry, including Merrill Lynch Asset Management, JP Morgan Asset Management, BNY Mellon and Franklin Templeton. Rebecca also spent 9 years as an analyst and director of equity research in Moscow, working for several Russian banks. In late 2019, she founded Quartet Communications, a boutique communications firm serving financial services clients. Her writing has been published in outlets including Pensions & Investments,, Inc. magazine, and She holds a B.A. in Russian from Purdue University and an M.S. in Finance from the Krannert Graduate School of Management at Purdue.

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