The ability to assimilate and analyze data is fast becoming the most valuable talent for securities traders, finds Greenwich Associates in a new report.
The U.S.-based firm’s online survey of over 100 capital markets professionals found that 75% believe data analysis will be the most valuable skill on trading desks over the next five years.
“Capital markets professionals believe insights from data analysis will have the biggest impact in two areas: investment opportunities and liquidity sourcing, as automation creates huge new datasets across nearly every function on the trading floor,” it said.
Greenwich reported that the financial services industry currently spends US$1.4 billion annually on consolidated market data feeds, and another US$300 million on alternative data.
“That spending appears to be going nowhere but up,” it said, noting that 95% of industry professionals expect alternative data to become more valuable in the next three to five years, and that 75% see market data feeds gaining value too.
As a result, 85% plan to increase their spending on data management technology over the next three to five years, it noted.
“Market participants now have access to tools that allow them to make sense of nearly unfathomable amounts of both structured market data and completely unstructured information,” said Kevin McPartland, head of research in Greenwich Associates’ market structure and technology group.
“Putting data to good use will require an influx of new talent to the trading floor, and data analysis will be the most valuable skill on trading desks over the next five years,” McPartland added.