In this episode of #StreetsTalksTo we are joined by Mark Schaedel, CEO and Brandon Baker, Principle of DataBP. We discuss the fascinating world of market data and how the impact of innovation and technology can be used to help make sense of the huge amounts of data and harvest unique insights. We talk about the genuine common goal across the industry for ultimate compliance, the importance of using the cloud and how DataBP are empowering and connecting the community of data providers to gain efficiencies, reinvent how they manage their market data and ultimately realise and commercialise the full potential of their often unexploited data assets.
DataBP is a global provider of software and managed services for managing market data and index commercialisation. They provide tools that run business lines in one easy to use platform and a whole suite of purpose built tools, allowing data businesses of all sizes to increase their revenue, reduce their risk, and provide an improved customer experience without having to increase any staffing footprint.
Mark is CEO of DataBP, and is also an advisor and founding member of the CalcGuardconsortium which provides investment management participants with technology to support order routing transparency. His previous tenures have included Managing Director and Global Head of Index Services at IHS Markit and served as an executive board member of IHS Markit Benchmark Administration Ltd., an authorized benchmark administrator in the UK and Netherlands. Mark spent 13 years with the New York Stock Exchange where he was the Global Head of Information Services Division and an executive officer of NYSE Technologies. After relocating to Amsterdam in 2009, Mark became active in European capital market structure and chaired the Federation of European Securities Exchanges (FESE) MiFID data working group and was a member of CESR’s MiFID working group. In 2012, Mark Co-Founded The COBA Project Ltd., a consortium established to create a European consolidated tape.
Brandon is Co-Founder with over 20 years of experience architecting, developing, and running technology solutions for data businesses. architecting, developing, and running technology solutions for data businesses. Prestigious career including Gemini Systems, where he focused on database design and web development for several clients, including CIT Group and NYSE. At NYSE, he led development of the data e-commerce website and the TAQ Web and Broker Volume products, among others, and managed the order-to-bill lifecycle for NYSE Technologies products. Then in Jan 2014 - he Co founded DataBP
Julia: Hello, my name is Julia Streets and welcome to the podcast series. StreetsTalksTo. In each episode I interview leaders from some of the most influential firms, bodies and initiatives in the financial services industry. In each episode we explore what’s at the very forefront of innovation and change. We think about the challenges facing the clients and the industry at large, and we uncover the opportunities that exist both today and as we look ahead, particularly as we all navigate these extraordinary times. I hope you enjoy the series which you can find on all good podcast channels and all the episodes are listed on our website, streetsconsulting.com, you can find these using the hashtag #streetstalksto. Thank you for listening and welcome to StreetsTalksTo DataBP. To begin with let me just tell you a bit about DataBP.
It’s a global provider of software and managed services for managing market data and index commercialisation. Think of it as an organisation that is reinventing market data, streamlining business processes and empowering data providers to ultimately gain efficiency and realise the full potential of their often unexploited data assets. They provide tools that run business lines in one easy to use platform and a whole suite of purpose built tools, allowing data businesses of all sizes to increase their revenue, reduce their risk, and provide an improved customer experience without having to increase any staffing footprint. I’m really intrigued to find out more. Today I’m delighted to be joined by two guests from DataBP. Our first is Mark Schaedel. He is the CEO and also, in addition to his life at DataBP, he’s an advisor and a founding member of CalcGuard consortium , which provides investment management participants with technology to support order routing transparency.
Now he’s had a very prestigious career and his 10 years have included Managing Director and Global Head of Index Services at IHS market. And he served as an executive board member of IHS market’s benchmark administration, which is an authorised benchmark administrator in the UK and the Netherlands. 13 years with the New York Stock Exchange, where he was Global Head of Information Services Division. He was also an Executive Officer of NYSE Technologies. What I should also mention is after relocating to Amsterdam back in 2009, he was very active in European capital market structure. He chaired the FESE, The Federation of European Securities Exchanges MiFID data working group, and a member of CESR’s MiFID working group as well. In 2012, he co-founded the COBA Project, which is a consortium established to create a European consolidated tape. Goodness, Mark, what a career. Thank you so much for joining us today.
Mark: Thank you so much. I’m exhausted hearing that laundry list of career milestones, but in that context, thank you for the warm introduction and I’m really excited to be here.
Julia: The great thing about these episodes is of course, we get to welcome a second guest, a co-founder at DataBP as well. It gives you great pleasure to welcome Brandon Baker. He’s the Principal and Co-Founder, and has more than 20 years of experience architecting, developing and running technology solutions specifically for data businesses. He has a prestigious career, including a tenure at Gemini Systems where he focused on database design and web development for several clients, including CIT Group and NYSE. There at NYSE, he led the development of the data eCommerce website, the tech web, and broker volume products among others. He managed the order to build the lifecycle for NYSE Technologies products. Then in 2014, he co-founded DataBP. And that is what brings him to where he is today. I’m delighted that he’s joined us here today to tell us more. Brandon, thanks for joining us.
Brandon: Thank you so much, Julia, for having me. Pleasure to be here.
Julia: I’m really intrigued, because the world of market data I was mentioning earlier in the opening remarks about how there is often untapped potential. Many people are handling the weird and wonderful world that is market data. It’s a world that I’ve certainly enjoyed in my career when I was working at the Stock Exchange, as well as working with other FinTech companies as well. Before we get into what you do and how you help them I’m really intrigued to understand what is it that’s keeping your customers awake at night at the moment. Because, also as I mentioned, you work on an international scale as well. Mark, should I come to you first of all?
Mark: I’d say that most of the providers of data in our industry, the capital markets industry, are concerned with the changes in terms of diversification of use cases, diversification of data use. The ecosystem of capital markets is really a data driven one and has really exploded with the use of new technology, which poses a challenge for providers of data to meet those demands and scale to meet the diverse needs of that community. Many of them were built or built their business processes and set up their relationships at a time when the world was much more simple, I guess, in some regards. So they’re really being stretched in terms of having to manage a much more broad and diverse user base, and also use cases which are unconventional based on the traditional business process that was set up to support these relationships. We focus on that and helping the evolution of data providers and apply innovation and technology to support their efforts.
Julia: When you talk about the simple use cases before, can you give us an example of how some of these use cases are becoming more complex?
Mark: In the early days of capital markets, users of data would sit behind terminals provided by vendors, and those vendors would form the relationships with the data providers themselves, aggregate the content, make it usable, package it. Now in our new world, we have technologies that allow you and I to consume data, offering very powerful tools for making sense of that data, acting on signals, harvesting unique insights. And now that forms a much broader and more diverse set of relationships for data providers to manage and respond to. Therein lies the challenge. All of them have diverse needs, diverse levels of capabilities from an administration standpoint, from a licensing management standpoint. And that really challenges data providers who are already facing a business that is inherently non-standard in terms of its business process and lack data governance practices, which are foundational to support these data licensing relationships.
Julia: It’s really interesting listening to you talk there about how the world has shifted, how people are seeking the diversification, if you like, of different use cases there. Brandon, I was mentioning in my introduction that your background’s very much in architecting systems and the operational side as well. I’d love to hear your thoughts as you talk to your clients around the world, addressing everything that Mark’s described about the way in which the world is changing. What are some of the challenges that they’re facing in terms of managing their operating systems and their ability to handle the market data and the way in which the world is operating?
Brandon: As Mark mentioned, all of the use cases are evolving, and as a result, what we are hearing from customers, whether they are exchanges, whether they are data vendors, whether they are banks as end users of data is concerned about compliance. The question is, how do I have certainty about compliance and how can I demonstrate that? When I began working in market data about 20 years ago, my idea of compliance was that each of the participants in the system were trying to skirt the rules, seeing what they could get away with, seeing what loopholes may exist in policies or contracts. That compliance was a cat and mouse game where firms would try to catch each other, trying to skirt the rules. The reality, of course, couldn’t be further from the truth. It wasn’t long before I realised that everyone involved in this ecosystem is trying to be compliant.
There are real challenges to doing that, and that I think is what makes this such an interesting system. Is that the exchanges, the data vendors, the banks, everyone has the same goal. Everyone wants there to be a common understanding of what is the policy, what is the commercial model? How does my organisation’s use of data translate into this contract that I have with a data provider and into the commercial model that the data provider has, and yet compliance with those policies remains so difficult to achieve. What we observed is that everybody comes into this well intentioned, but the lack of an operating system, the lack of any kind of an organising system for these exchanges and data vendors and banks to use makes it difficult. This is where we’ve attempted to step in and fill that gap.
Julia: I wonder if we could delve a little deeper then, because there’s some very key things coming out of these opening remarks around complexity, governance, compliance, appetites to all serve this end goal. And everybody’s on that pathway of trying to become compliant. Let’s get into how you help them address those challenges. Brandon the natural thing is to stay with you.
Brandon: As with many founders, the speed of the idea for doing what we do at DataBP started with our personal experience, Mark Bird, my Co-Founder and I had the responsibility at NYSE Technologies to manage the subscriber agreements that we had with exchanges around the world, to manage the onboarding of new subscribers and to manage the reporting of those subscribers. By that time, we had had several years of experience building the back office systems for licensing and reporting and billing that’s used by the consolidated tape, but we did not realise that other exchanges around the world did not have systems like this in place. So we struggled even as market data, business process experts, even as technologists struggled to deal with what should have been the simple task of managing all of the reporting and compliance with exchanges.
We found that off the shelf software, which we had quite a bit at our disposal, failed to get the job done. We had SharePoint, we had NetSuite, we had several enterprise calibre tools available to use. Yet what we found was that we ended up using Excel, using email, not using systems that provided a good audit trail and provided the scale that we really required. We started DataBP to fill the gaps where off the shelf software was unable to get the job done. Coming back to what I mentioned about our customers and the need for compliance, what we have found and what we believe is the number one thing to achieve compliance is the right business process. The biggest impediment to compliance isn’t necessarily the diversity of policies or the diversity of commercial models that are out there, those are all to be expected. That is how innovation happens.
The biggest impediment to compliance is the diversity of business processes, where if you need to do business with several dozen counterparties to do market data administration, and each of them have a completely different process, a completely different tool, a completely different system for doing that. It is not possible to do what you need to do.
Julia: This sounds very much as though it’s an end to end workflow approach to handling market data, which sounds to my mind really unusual because actually having worked in exchanges, and I’ve worked in the industry for a while, it tends to be very piecemeal. It’s interesting hearing your thoughts about in the quest for compliance, there needs to be this processing end to end. Can I just ask you, so this is a SaaS platform. I mentioned the open remark, so it’s a platform play. Just talk to us a little bit about the power of the platform, if you like?
Brandon: The platform fills the gaps that exist naturally between a CRM and a finance system, and a web portal specifically addressing the needs of data businesses. Market data is such a weird and interesting business to be in because there are as many products as there are ways to use information, which is practically infinite. To try and put structure around the license right, the data usage is what the system aims to do. The way that we are aiming to provide this operating system to the industry is by putting tools in the hands of users that have these obligations.
Julia: Let me bring in Mark at this point, because actually Mark we talk about this is very much a community play, it seems to me. We’ve talked a little bit about the ecosystem, the disparate members with disparate interest, but with a common goal for ultimate compliance and also the ability to commercialise and get some commercial value out of their market data as well. Can you tell us a bit about how you do that? How do you help people reap the commercial benefits that are out there for them?
Mark: We focus on the capital markets because they are very much a data driven ecosystem. Data has become a primary source of value in terms of how value is created and exchanged. It’s no longer the exhaust of markets. It’s no longer just a byproduct of transactions. Data’s actually driving the business. We believe that there has to be some evolution in terms of the way that data is managed by the industry and can be streamlined in order to scale to meet the global diverse needs that we’ve talked about today. That’s really what we’re focused on. That’s really what the platform does. And it really connects that community, because we have the relationship between the provider of data, the end user of data and the data source itself, all connected with a platform that they can share information through.
Mark: We have a single source of truth for who licensed what to whom, for what products, for what time periods and all of that can be viewed by every participant in that relationship. The providers themselves of data, the redistributors, the vendors and the end users. That reduces a lot of the complexity involved with sharing of files over email and the collaboration tools that we’ve used, conventionally, which are just nonstandard and are disconnected. That’s really the focus of what DataBP provides.
Julia: I think one of the biggest trends in the industry has been the adoption of cloud. I mentioned again in the opening remark, that you’re very much of an international organisation. Could you share your thoughts on to what extent is cloud an enabler, or are you still seeing that some organisations are perhaps a little more conservative in their attitude towards cloud?
Mark: The cloud is definitely an enabler. It creates efficient means of data distribution for data providers to augment and compliment their existing distribution channels, and traditional distribution relationships. It creates a lower cost entry point for introducing new products to users who want a sandbox style environment to test new products and to evaluate new products without having to generate a lot of cost build infrastructure with long lead times. Reducing the time to market, so to speak, for data providers is a big role of the cloud. Our system provides automation for cloud deployments. Everyone seems to have a cloud strategy, but thinking about how they’re going to manage cloud is always an afterthought. We focus on that proposition of making sure that the right users are entitled to the right information through these cloud platforms. Our APIs talk directly to the cloud providers themselves and to the enforcement layer that controls data access.
That means we can provision data much more efficiently and actually sign up customers and provision data in moments as opposed to days or weeks. That’s a big step forward for the industry, we’re just really starting to see that come to fruition and take off. So cloud isn’t as pronounced as the traditional forms of connectivity yet today, but increasingly the cloud applications that live in the cloud are better served by cloud distribution themselves. It’s a channel and it’s complementary to existing distribution channels, but it brings a lot more possibilities in the future. We’re focusing on that as a source of innovation as well.
Julia: I know there are some concerns and considerations and you talked there about data and APIs and data entitlements as well. Presumably you can actually help address that, partly because it’s a platform play, partly because of the connections of the APIs. But I’d love to get a little bit deeper actually, in terms of this question about data entitlements. Is this a concern for your clients?
Mark: Absolutely, if you think about the entitlement is the access control for data, which is the final gatekeeper for a user experience. And in many ways the users themselves want a more automated and streamlined approach to data access because it makes their life easier. When those entitlement instructions have to be provided by a disconnected third party often that requires translation of instructions, interpretations, and because of the diversity and the board data governance practices, the non standardisation, everything we talked about earlier, those interpretations can vary. So this problem of compliance really starts with the nonstandard business processes that everyone uses to communicate entitlement instructions. When we can get to a level where everyone’s connected to an API, and this is automated, streamlined and we all have a shared view of what actually was provided a shared audit trail of what happened when, a lot more efficiency can be brought to the industry.
That’s what we’re focused on. We’ve so far been able to build critical mass as Brandon mentioned. We’re on the road now to establishing that real community of connected parties who can now do business in a way that’s much more streamlined and much more effective in terms of realising the potential of their information assets. That’s really critical, I think, for today’s information providers and would be information providers tomorrow, we’re starting to see demand from banks and asset managers like Brandon mentioned, and a lot of the disciplines follow the same structure that exchanges index providers and vendors have set up and practised for most of their lives. We’re starting to see all members of this community start to take the form and shape of a data provider. That’s when I think the community, we all hear about community plays, but that’s when the community really starts to come alive when everyone can be connected and leverage the same convention and best practice that this platform and technologies provide today.
Julia: I’m itching to jump in here because I think that’s really exciting. I think that’s really exciting when you begin to see how actually, also the shape and the form of market data is going to change as the future unfolds. That’s when you begin to see a sort of future pathway and a vision for what the shape of market data might be. I want to return to this question regulation. It’s a question I ask all our guests, it’s a bit of an odd one, but I’m always really intrigued to know what’s your favourite piece of regulation. Like I mentioned in the opening remarks, of course you’re involved in MiFID, so I’m fully expecting there’d be a very MiFID-centric answer and also something around the consolidated tape, perhaps.
Mark: That’s a good guess. I don’t know if I’d call it our favourite piece of regulation, but it’s certainly something that we’re focused very much on, and is very concerning to our constituents and clients due to the impact that could have potentially on their businesses. Both in Europe and the US, we’re seeing active regulatory consolidated tape reforms, and we’re following those very closely, but more from a nuanced area of these debates. That is the role of the consolidated tape administrator. They exist in the US today, they’re being changed to include or to be provided by an independent administrator. That was the result of a recent SEC order, and here in Europe, as we start to visualise what a consolidated tape looks like, I believe the role of a consolidated tape administrator will become increasingly important.
The tools that we provide are exactly what a consolidated tape administrator needs to do their job and to offer something that is well constructed, streamlined, and a better user experience overall. We’re quite excited about the opportunity to innovate around how consolidated tapes work today. Even though we don’t have one here yet in Europe, we’re a much better starting place. When we think about how these tools can be adopted from the start, as opposed to being retrofitted in the case of the US, where there’s a lot of room and potential for innovation in terms of how those tapes work.
Julia: It’s interesting, isn’t it? Because I think everybody’s rethinking in so many different ways about, as you say, the administration, as well as the commercialisation, if I want to be as simplistic as that. Brandon, can I ask you the same question? Your favourite piece of regulation at the moment, and that you’re particularly paying attention to?
Brandon: Well, as Mark mentioned, we’re particularly paying attention to that consolidated tape regulation, because I got my start in this industry working for the consolidated tape. I was at New York Stock Exchange and had a leadership role building the systems that underpinned the back office administration of the consolidated tape. We went through several iterations of building licensing tools, of building reporting tools and building tools for the consolidated tape so we’re very familiar with it. And recognised the importance that the consolidated tape plays in the industry and getting information out to investors, to a broad range of investors beyond just the big organisations, but also to retail individual investors like you and me. The idea that we could take everything that we have learned since that time that I worked on the consolidated tape and really innovate and provide new experiences, new and simplified ways of licensing and accessing information. Bringing together all of the new types of distribution of consolidated data that are available now that weren’t available 20 years ago is very exciting to me.
Julia: Of course there are so many questions then also about what this means in terms of global transformation of market data, also thinking about the regulation around, I just think to Asia, I mean, I think it’s fascinating how all of this world is going to shift. I have to say, I’m really enjoying the conversation. I didn’t often get an opportunity to talk about market data. I think we should talk about market data a lot more actually. I think I might start a podcast on my own just about market data. I hope you’re enjoying the discussion as much as I am. Here we are on StreetsTalksTo DataBP. If you want to know how to find it, we’re available on all good podcast channels, and you can find this episode on streetsconsulting.com, our website. On social media, just follow the hashtag, #streetstalksto.
Returning to DataBP, I’m really keen as we look ahead. I’ve been deliberately thinking about what does this mean for global impact? You know, what does this mean in terms of regulation? What does this mean in terms of commercialisation and market data? So as we look ahead, as we navigate these incredible times as well, love to hear your thoughts about what are your clients thinking about, and also what you as a business think about? Brandon, can I come to you first of all. When you’re talking to your clients, what’s top of mind?
Brandon: Well, what we have planned moving ahead is more compliance and business process. So one of the things that we are talking about quite a bit is the dream of the two thousands, it’s APIs. It’s using this system to system communication, information handoff, actually facilitating transactions from system to system, using APIs the way that we dreamed it would happen 10-20 years ago. We’re finally now reaching the critical mass to do that.
The challenge of course, is that if you have a system in which counterparties are just one to one, and everybody needs to build to an individual API that is put forward by one particular data vendor or one particular exchange, you’re never going to get traction. It’s never going to economically make sense to use APIs in that way. What we have managed to do is to get critical mass using one platform, using one library of APIs that DataBP can provide, that can really allow the, sometimes tedious, sometimes mundane administrative tasks that go with market data to be performed at scale. For example, you need to add new recipients of data to your feed. You need to mark someone who has left the firm, has no longer permission, that you can do that with one keystroke and immediately have that deployed to 15 / 30 / 45 different destinations, all using the same API that either you can develop or that we develop.
Julia: It’s all about simplicity. I wonder if I could just take the moment to ask you a question about digital rights, because this does come up in the context of market data as well. So presumably where we’re trying to navigate all of that in the most simple way possible, what role does digital rights have in that?
Brandon: Digital rights, in fact, goes hand in hand with those APIs. APIs are the mechanism by which these systems can communicate to each other, but what is it that we’re communicating? It’s a very complicated idea to say that I have this type of information that a licence grants the rights to use it in particular business activities, or to share it in very specific ways. And so digital rights and the ODRL syntax and the ODRL working group that DataBP participates in is aiming to write a language to define that, the same way that we would use a contract to describe the rights and obligations that come with entering into an agreement, digital rights will allow systems to generate that those rules, will allow a system to generate that contract and then another system to interpret that and provide that certainty of compliance that everybody is after.
Julia: It’s really good to delve a little deeper in it, because we tend to have quite a superficial conversation in the industry about the ambition, the vision, the way in which we’re addressing the complexity of simplicity. I’m really, in my very interesting life where I actually get very excited about detail, delving down a little deeper into digital rights is really important. So thank you for humouring me as I went a little further down into that. Mark, I’d love to get your thoughts about the business as a whole, and as you’re talking to the clients, what do you see on the pathway that faces you?
Mark: I think we’ll start to see data follow the path of media. I like to think of it as financial media. What we’ve seen in terms of how media has been adopted, where you and I consume digital media ourselves, and all of the controls and mechanisms to make that consumption easier, to make compliance with the licensing agreements easier is really an important part of achieving those goals of more efficiency in the business, of realising the value of your content, your asset, your information assets.
I think we’re going to see an evolution that looks a lot like the way the media has evolved today in terms of the provision of media from movie studios and recording studios and how that’s provided and distributed to the world. We’ve all benefited from built in digital rights that we don’t even see or feel. They’re just built into the distribution framework, so it becomes a natural part of distribution. The users of data aren’t burdened with having to record or manage anything, because it’s all done for them through their consumption methods. I believe we’ll start to see services evolve this way and that the capital markets community embrace more of these types of technologies. We’re really focused on being a provider of those types of things.
Julia: Amazing. It’s fascinating to think about how this area, that years ago was a kind of peripheral function, with any kind of exchange vendor in the industry is now being transformed. As you say, it could almost follow the trends and patterns of other sectors like the music industry. It’s been a really fascinating conversation. I know that you run a couple of user groups for your clients as well. I guess there was a call to action for your audience here to get in touch. Let me just tell everybody how to do that. The website is databp.com. On Twitter it’s @marketdatabp, and of course could be found on LinkedIn as well. It’s been a wonderful conversation. Brandon Baker. I know you’ve just flown in for the states, I’ve caught you in London, you’re just about to run around and have meetings. Thank you so much for taking the time to be with us today.
Brandon: Thank you so much, Julia. I hope the jet lag wasn’t too apparent.
Julia: Not at all. I love the fact that the two of you have met in a co-working space. It’s wonderful to hear the buzz of people doing business again. Mark Schaedel, CEO, thank you very much for joining us.
Mark: Thank you so much, Julia, for having us today and for doing this. Really enjoyed it.
Julia: Wonderful. Thank you to everybody who’s been listening today. I hope you’ve enjoyed this discussion as much as I have. It won’t be the last time we talk about market data. Thank you for listening. I’ve been Julia Streets and today this has been StreetsTalksTo DataBP. Thanks for listening.
Roshan: This episode of StreetsTalksTo was produced by me, Roshan Roberts on behalf of Streets Consulting Limited. Streets Consulting is a business development, marketing and communicating consultancy that’s focused on helping FinTech from the smallest startup companies to some of the world’s largest global organisations. Everybody’s trying to innovate and everybody’s trying to grow, and you can find this episode on streetsconsulting.com, and using the #streetstalksto. We can also be found on LinkedIn and on Twitter @streetsconsult. Thanks for listening.