Despite the proliferation of market data platforms and custom internal applications that have been designed to replicate or replace Microsoft Excel over the years, Excel remains arguably the most widely-used mission-critical application for financial services industry professionals.

Microsoft Excel spreadsheets and models are employed across a wide range of processes, from investment research and portfolio management to currency trading and loan processing, and just about everything in between. The common thread?  They all require financial market data as an input.

What’s the best way to integrate market data into Microsoft Excel?  Later in this article we’ll explain why a cloud-based market data solution provides an optimal combination of ease-of use and value. But first, let’s take a look at the most common ways market data can be integrated into Microsoft Excel.

Traditional means of integrating market data into Microsoft Excel

There are three methods that are commonly used to import market data into Microsoft Excel, each with key drawbacks:

• Downloading market data from public sources via CSV files
• “Scraping” market data from public websites
• Importing market data using a third-party vendor’s Microsoft Excel Add-in

Let’s consider each of these methods, starting with downloading market data from public sources.  Unless you enjoy downloading dozens of files from various websites and manually copying and pasting data each and every time you need it updated, this time-consuming method is not feasible for the vast majority of financial services professionals.  In addition, the quality of market data pulled from public sites can be an issue, particularly for processes such as investment analysis where real assets are on the line.

Next up, “scraping” market data from public websites. This legally questionable practice involves creating automated processes to pull data from publicly-available resources, often violating the terms of service of the originating websites.  Setting aside the legal implications and data quality issues, scraping is a time-intensive project that is subject to outages depending on the availability of the source website.  In addition, scraping doesn’t address the need for real-time data.

Finally, importing data via a vendor’s Microsoft Excel Add-in. This method is preferable to the other mentioned above, as there’s less manual effort and the data is of higher quality.  However, this is where cost becomes a major factor.  To access market data via Microsoft Excel, vendors typically require you to purchase market data terminal licenses, despite the fact that you may only need the data within Excel.

In addition, if you only require a limited scope of market data, with Microsoft Excel Add-ins, you still pay a premium for a wide range of data you will never use.  This problem is compounded if you require data on multiple asset classes and have to deal with more than one vendor.

How a cloud-based market data solution delivers superior results for Microsoft Excel users

In contrast to the aforementioned methods, a cloud-based market data solution offers a powerful combination of ease-of-use and value.  With a cloud-based solution, all that’s required is a few lines of code and an internet connection.  Not a programmer?  Not a problem—even those without a programming background can be up and running in just a few minutes.

A cloud-based solution uses Web service APIs that return data in XML format—great news for Microsoft Excel users, because Excel has fantastic XML support.  XML allows you to go beyond the simple file import available with CSV to create direct links to Web services that allow you to pull and update real-time market data from within Microsoft Excel.

And finally, market data pulled from the cloud is priced on an on-demand basis, where you only pay for the data that’s used. No licensing fees for market data terminals and no extra fees for the Microsoft Excel Add-in functionality. This represents a sizeable savings for those whose workflows tend to be primarily dependent on Microsoft Excel.

For more information on how easy it is to import XML into Excel, check out our article How to Import Market Data into Excel Using XML.

In today’s environment of shrinking margins, it’s incumbent on wealth management firms and RIAs to ensure that they’re optimizing the value they receive across all vendor relationships.  Market data expenditures, which represent a substantial slice of ongoing operating expenses for advisors, are no exception.

At most firms, market data is accessed within desktop terminals and Microsoft Excel.  Firms will often have to pay a steep annual fee for terminal access, with extra charges incurred to access the same data within Excel via an Excel add-in.

While vendors have added a wide range of datasets to their terminals over time, that data comes at a price. Subscription costs for industry-leading market data terminals can run anywhere from $5,000 – $20,000 per user per year.

This one-size-fits-all pricing structure is expensive and not terribly customer friendly.  Traditional market data terminal pricing structures fail to account for the fact that:

• Many users only require access to a limited range of datasets
• Many users only require a limited overall quantity of data
• Terminal subscriptions are often underutilized due to personnel turnover

Market data is also often required for a wide variety of internal applications, including proprietary research portals, quantitative modeling software, portfolio accounting systems, and client reporting systems.  This typically requires a separate datafeed licensing agreement, and a complex data management system involving data cleansing and parsing, databases servers, network infrastructure, and ongoing system maintenance.  The overhead required to keep these data management systems running smoothly can often cost more than the data itself.

How the cloud can help wealth managers reduce market data expenses

There’s been a considerable amount of buzz about the cloud in recent months, and that buzz is now extending to the wealth management industry and how the cloud can help firms extract more value from market data relationships.  New cloud technologies are transforming the market data landscape, enabling firms to reduce operating costs and complexity and place greater focus on servicing their customers.

There are two important factors where cloud-based solutions have an edge over traditional solutions:

• Simplified delivery – A cloud-based market data solution delivers data via sophisticated web APIs that can be easily integrated into any internal application. This enables firms to bypass costly infrastructure and maintenance headaches, and quickly incorporate market data with just a few simple lines of code everywhere it’s needed, including Microsoft Excel.
• On-demand pricing  –  In contrast to a flat fee, cloud-based market data is priced by actual usage.  This means that users only pay for the data used, which for the vast majority of firms means lower market data costs.

In combination, these two factors make a cloud-based market data solution a compelling alternative to traditional terminals and datafeeds, particularly for cost-conscious wealth managers looking to optimize their market data budget.

This is the fifth post in our “Top 5 Wealth Management Technology Challenges Addressed by the Cloud” multi-part blog series. Be on the lookout for our next article, “Building proprietary investment models and reporting capabilities in Excel.”

Investment management firms are among those facing an uphill climb to conform to the regulatory requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  While legislators and lawyers are still busy sorting through the details of the controversial legislation, it is clear that reporting rules will be more stringent, requiring more transparent disclosure by asset managers.

Here are a few of the issues that will impact investment management reporting:

- To reduce systemic risk, regulators will require firms to provide more comprehensive information, and have it available on demand
- To the fullest extent possible, this information will need to be real-time or near real-time
- To comply with the above trends, firms will need to identify solutions that enable them to provide an enterprise wide view of activities, positions, and risk

Complying with these new regulatory requirements will be expensive, but will be less so if investment management firms can implement an enterprise-wide approach that provides the flexibility to conform to the rules of today as well as to an unpredictable tomorrow.

This enterprise-wide approach must capture data from various internal applications and external sources, then standardize the data and make it available on demand in an easy-to-access format.   Compliance requires that the data be accurate, complete, and timely.

How market data from the cloud can help compliance reporting

This restructuring of data management procedures is obviously a huge undertaking, but today’s cloud technologies make compliance with Dodd-Frank regulations more manageable.  Cloud-based data management systems offer a centralized repository that enables a holistic, firm-wide view of risk exposure, available to all key stakeholders over the internet instead of across several closed proprietary systems.

Once this type of data management system is in place, the next step is to obtain the necessary referential and pricing data and integrate it—a real chore with traditional market data feeds, requiring additional infrastructure and maintenance.

However, market data delivered over the cloud fits seamlessly with just about any data management system.  A cloud-based market data solution allows firms to instantly enrich their regulatory and investor reporting with comprehensive coverage of real-time, historical, and reference data.

A key consideration driving financial advisors’ data management strategies is how to leverage data and technology to forge stronger client relationships.  There’s been considerable buzz recently about emerging new technologies that have improved wealth management systems such as CRM and account aggregation.  However, an area that’s still very much unexploited and rife with opportunity is the development of advisory-branded mobile applications.

The explosive growth of smartphones and tablets in recent years is accelerating, and is creating demand for all kinds of mobile applications. As of this writing the Apple App Store, the world’s largest app marketplace, boasts over 500,000 iOS applications for iPhone and iPad.

Interestingly, there have been only a handful of mobile applications released by wealth managers thus far.  Expect that to change.  According to a recent PricewaterhouseCoopers Asia Pacific Private Banking Survey, nearly 50 percent of private banks surveyed expected to use mobile applications to interact with customers in the next two years.

Mobile access matters for today’s wealth management clientele

The new generation of high net worth customers increasingly expects information delivered on demand wherever they are, whenever they want it.  These customers are already taking advantage of a wide variety of mobile applications from their financial services providers, covering areas such as mobile banking and brokerage account trading.

They’re also following the markets using innovative financial mobile applications from third parties that present market data information in new and exciting ways.  Take for instance StockTouch, the Apple App Store’s top Finance iPad App of 2011.  The app makes elegant use of the touchscreen’s native capabilities, enabling users to view a heat map of stock market performance by sector, and then intuitively drill down to a sector or security level for more information, including news and charts.

Wikinvest has a mobile application that takes a different, more personalized approach, consolidating a user’s various brokerage accounts into a single view that allows the user to dynamically monitor real-time portfolio balances and track the performance, news, and fundamentals of portfolio positions.

Amid this proliferation of financial mobile applications, it’s only a matter of time before wealth management clients expect the same level of mobile application sophistication from their advisors.  Advisors will need to present information such as account balances, transactions, and portfolio positions at a minimum.  To differentiate will require additional capabilities such as in-depth market analysis and research.

It appears that there is already some pent up demand.  J.P. Morgan, one of the first to market with iPhone and iPad mobile applications for wealth management customers, has reported that mobile adoption has thus far been more rapid than the uptake of their internet site.

Wealth managers reluctant to embark on a mobile application communication strategy are at risk of falling behind the competition, and not connecting with the tech-savvy segment of today’s customers, as well as the majority of tomorrow’s customers.

How the cloud can help jump start the mobile application development process

Market data is a key component to the development of wealth management mobile applications.  Advisors who deliver data-rich mobile applications will strengthen their connection with customers while enhancing transparency and trust.

A cloud-based market data solution is well equipped to meet mobile application challenges head on. Cloud-based web APIs can stream real-time and referential market data to mobile applications seamlessly, allowing firms to bypass the headaches and expenses associated with integrating data from traditional data feeds.

With the help of a market data cloud, firms can reduce the mobile application development cycle, launch their apps in less time, and as a result create deeper engagement with their customers.

This is the fourth post in our “Top 5 Wealth Management Technology Challenges Addressed by the Cloud” multi-part blog series. Be on the lookout for our next post “Reducing market data expenditures”.  For further reading on this topic, check out “The 3 Phase Evolution of Buy-Side Mobile Apps.”

In the wake of the recent financial crisis, wealth management clients are more focused than ever on the value financial advisors deliver.  While portfolio performance has always been an important element in the calculation of value, customer service remains the most critical factor in retaining customer assets. And a fundamental component of customer service is developing highly customized investment strategies that better fit the needs increasingly skeptical, and often increasingly sophisticated clients.

The evolving mindset of wealth management customers

Why have wealth management customers become more skeptical?  The market downturn revealed that many portfolios were not adequately calibrated to the risk their owners were willing to tolerate.  Ensuring risk alignment is a critical component of wealth manager service, so these misalignments resulted in an erosion of trust in many financial advisor relationships.

In parallel with this erosion in trust, the ubiquitous availability of financial information and advanced trading capabilities has resulted in a more sophisticated breed of clients who are prepared to invest on their own behalf if they don’t perceive adequate value in wealth management services.  These customers not only demand that investment and allocation strategies are fully aligned with their unique risk requirements, but are also looking for full transparency into potential risk factors and the market data that drives underlying investment decisions.

In response to this shift in customer attitudes, financial advisors must escalate their commitment to customer service and produce differentiated, risk-cognizant portfolio strategies that look further afield for growth.

Simply recommending a basket of mutual funds, ETFs, and equities may not address unique client requirements.  To attain a heightened level of customer service, wealth management firms need to provide their customer-facing teams with tools that enable them to investigate a broader range of opportunities.  But as the investable universe expands, firms need to also ensure that the supporting market data is readily available within all relevant applications, including those that deliver information to customers.

How the cloud can help financial advisors develop new strategies

The market data cloud lessens administrative and data infrastructure burdens on wealth management firms by enabling them to quickly bring together disparate sets of market data into any application via the web. Potential applications include basic tools such as Microsoft Excel and internal research portals, advanced mobile applications that help financial advisors better engage customers during account reviews and new sales pitches, and reporting applications that provide necessary transparency.

The market data cloud offers instant access to a broad range of financial information spanning equities, fixed income, mutual funds, ETFs, commodities, options, futures, foreign exchange, and more.

Having immediate access to this wide swath of market information at their disposal enables financial advisors to better respond to the widening variety of client requirements and create customized strategies that differentiate from the competition.

But how does a cloud-based market data solution improve upon other more traditional methods of market data access?  Let take a look at broker/dealer portals for example.  These portals often contain the necessary data, but lack the ability to take that data and easily integrate it into other wealth management enterprise applications.  In contrast, the market data cloud uses flexible web APIs that enable data to flow freely to any application.

And as compared to traditional datafeeds, the market data cloud enables wealth management firms to bypass the costly infrastructure and maintenance headaches that are associated with hosting and parsing datafeeds to extract the necessary information and feed it to end user applications.  Again, the cloud proves to be a much more flexible delivery mechanism, saving firms time and money in implementation.

This is the third post in our “Top 5 Wealth Management Technology Challenges Addressed by the Cloud” multi-part blog series. Be on the lookout for our next post “Staying connected with customers 24/7”.