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.

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.”

In this post, I explain the advantages Xignite’s financial API mash-up platform Splice provides in improving mobile app performance. Splice lets you create composite APIs by mashing and transforming other APIs. It also offers a visual designer where you can build the exact API you need to power mobile apps.

Advantage #1: Reducing Network Bandwidth

Network traffic is one of the biggest obstacles to mobile app performance. API mash-up tools like Splice let you reduce the amount of data returned, by letting you trim the output of APIs. This facilitates efficient memory utilization and improves mobile app performance.
Imagine you were developing a mobile app like OpenFin’s PNL tool, one that displays real-time financial market data. To get data, you would need to use the GetRealQuote operation from XigniteBATSRealTime. The data fields returned by this API are given below:

<Symbol>msft</Symbol>
<CompanyName>Microsoft Corporation</CompanyName>
<Date>3/28/2012</Date>
<Time>2:01:14 PM</Time>
<Open>32.55</Open>
<Close>0</Close>
<PreviousClose>32.52</PreviousClose>
<High>32.7</High>
<Low>32.16</Low>
<Last>32.16</Last>
<Change>-0.36</Change>
<PercentChange>-1.107</PercentChange>
<Volume>2442414</Volume>
<Bid>32.15</Bid>
<Ask>32.16</Ask>
<Spread>0.01</Spread>
<BidQuantity>9138</BidQuantity>
<AskQuantity>10621</AskQuantity>

For a mobile app, you might not need all the fields (for e.g. Volume, BidQuantity and AskQuantity). Essentially, you are transmitting more data than you need. A more efficient way to deal with this to trim the API output, which can be done using an API mash-up tool.

I trimmed the output of the GetRealQuote operation using Splice. It now returns only the high, low and last. The trimmed output fetched from the API is given below:

<Last>32.06</Last>
<Low>32.045</Low>
<High>32.7</High>

API URL: http://splice.xignite.com/CustomWS/CWSEditor.aspx?CloneSplice=rsrivastava_ReducingBandwidth_Splice

Keep in mind you must be logged into your Splice services account in order to receive data. If you don’t have an account, just sign up for a free trial.

Advantage #2: Reducing Overhead

Imagine you were developing an mobile app where you need to fetch both equity and foreign exchange(forex) quotes. The inefficient way to get data would be to:

1. Make a request to XigniteBATSRealTime for an equity quote.
2. Parse the response.
3. Display it on the screen.
4. Repeat the steps for forex quotes.

On mobile devices, each of these actions is resource intensive because it consumes battery life. On the other hand, if the equity and forex APIs are mashed up using a mash-up tool, all the data can be returned in a single API call.

<GetRealQuoteReturnObject>
<Last>32.26</Last>
</GetRealQuoteReturnObject>
<GetLatestCrossRateReturnObject>
<Rate>0.75094997882843018</Rate>
</GetLatestCrossRateReturnObject>

API URL: http://splice.xignite.com/CustomWS/CWSEditor.aspx?CloneSplice=rsrivastava_Reducing_Requests

This reduces the processing overhead and overall processing power required, improving mobile app performance.

Advantage #3: Parallel Processing (Speed)

An API mash-up such as the one above lets you process API calls in parallel. In the previous example, the equity and forex APIs are independent of each other. Splice is an API mash-up tool that automatically splits the request into two parts, gets the data in parallel from both APIs and then returns the output. The data is thus returned to the mobile app and as a consequence, to the user faster.
Like the previous example, there might be situations where parallel processing might be difficult to implement for a mobile app. In such cases, it might be best to leave the implementation of such functionality to a mash-up tool, like Splice.

API URL: http://splice.xignite.com/CustomWS/CWSEditor.aspx?CloneSplice=rsrivastava_Reducing_Requests

Advantage #4: Multiple Data Formats Available

Most mobile app developers prefer using REST instead of SOAP because it is a lightweight protocol. On the other hand, there are mobile app developers who still use the latter. Splice allows you to return data in multiple formats. After the API mash-up has been created, Splice gives you the following URLs:

WSDL URL: http://splices.xignite.com/rsrivastava_Reducing_Requests.wsdl
JSON REST URL: http://splices.xignite.com/rsrivastava_Reducing_Requests.json?Header_Username=yourauthenticationtoken &Symbol=MSFT&From=USD&To=EUR
XML REST URL: http://splices.xignite.com/rsrivastava_Reducing_Requests.xml?Header_Username= yourauthenticationtoken &Symbol=MSFT&From=USD&To=EUR
CSV REST URL: http://splices.xignite.com/rsrivastava_Reducing_Requests.csv?Header_Username= yourauthenticationtoken &Symbol=MSFT&From=USD&To=EUR

This gives you the freedom to use the data format that is best suited for your mobile app.

Advantage #5: Leaving the complexity in the cloud

Splice allows you to mash-up market data APIs with mathematical utilities. As an example scenario, consider a mobile app that has users all across the globe. It makes more sense to display stock quotes in the user’s local currency. Using an API mash-up, you can implement the currency conversion in the cloud. Leaving the complexity in the cloud saves you valuable processing power.
Using Splice, I created a mash-up that uses the GetLastQuote, GetLastCrossRate and UtilitiesMath operations to get the stock quote for MSFT and then convert it into EUR. The XML output for the mash-up is given below:

<GetRealQuoteReturnObject>
<Last>31.9</Last>
</GetRealQuoteReturnObject>
<GetLatestCrossRateReturnObject>
<Rate>0.75379249453544617</Rate>
</GetLatestCrossRateReturnObject>
<ReturnValue>24.04598057568073</ReturnValue>

API URL: http://splice.xignite.com/CustomWS/CWSEditor.aspx?CloneSplice=rsrivastava_ReducingBandwidth_Splice

Conclusion: As mobile app development is getting more complex by the day, it is important for developers to pay attention to performance. API mash-up tools are a great way to achieve this goal. The true flexibility and power API mash-up tools offer can only be gauged by using them. I invite you to try Splice. Please feel free to let us know your views on it.

Today’s increasingly savvy retail investors, armed with the latest smartphones and tablets, expect real-time market information wherever they are, whenever they want it.  They’re using mobile devices to follow the markets, monitor their current portfolio, and perform detailed research on new investment opportunities, including mutual funds, index funds, and ETFs.

There are several upstart firms who have developed innovative mobile applications that cater to the retail investing segment such as StockTouch and Wikinvest. Also leading this effort in financial services are retail brokers such as Fidelity and Charles Schwab, who released their first mobile trading apps in 2010.

However, the investment management industry has been slower to leverage the mobile channel, with security concerns as one of the key obstacles. While security is certainly an important factor to address, investment management firms that are slow to embrace a mobile marketing strategy are at risk of being ignored by the affluent investors within this channel and falling behind the competition.

The Benefits of Mobile Applications for Investment Management

The benefits of mobile applications for investment management firms are clear.  First, firms can improve client satisfaction by enabling them to better follow their investments and perform research whenever, wherever.  Second, mobile applications can reduce servicing costs.  And third, well-designed and informative mobile applications can help firms position themselves as industry innovators.

However, simply releasing a mobile application on one or two platforms with basic fund information may not yield the results investment managers are looking for.  In the high-stakes battle for customer assets, investment management firms need to differentiate from the competition. Branded, data-rich mobile applications that showcase a firm’s retail offering and keep customers coming back for more can serve as a critical tool in the marketing mix.

Once the decision to pursue a mobile strategy is made, the challenge is to figure out how to develop the applications quickly and cost effectively, especially across multiple platforms to engage the full spectrum of mobile users.  Enter the market data cloud.

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

Market data is obviously a key component to the development of investment management mobile applications.  Mobile devices are now capable of delivering advanced data interfaces such as interactive charts, real-time quotes, and analytics.

A cloud-based market data solution is well equipped to meet mobile application challenges head on. Cloud-based web APIs can stream real-time, referential, and historical data, as well as charts to mobile applications seamlessly.

These “plug and play” APIs allow firms to save time and development costs by bypassing the headaches associated with integrating data from traditional data feeds.  Cloud-based web APIs also work with any platform, whether a firm is developing for Android, iOS, Blackberry, or HTML5.  This enables developers to focus their attention on optimizing the interactive elements of their mobile applications, rather than additional time wrestling with data infrastructure, hardware, software and feed handlers.

Finally, since market data from the cloud is delivered over the internet, it makes their mobile applications scalable.  As the popularity of their mobile applications grows, firms don’t need to be concerned with increasing capacity on the back end.

_____

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

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.

This is our second post in the HTML5 series. There are number of new tags in HTML5 that aid in the development of mobile financial apps. In this post, I aim to explain these new HTML5 tags and how they facilitate the building of fully functional financial apps with native user experience.

We partnered with our friends at OpenFin, to develop a HTML5-based mobile app. They developed a HTML5-based financial app (PNL tool) for the iPad. The app gets updated every five minutes and provides quotes for securities across multiple asset classes (stock, bonds, options and futures). The app was developed in 2 weeks flat.  As they say, seeing is believing. To get a feel of how powerful HTML5 apps can be, download the app for free on your iPad.

The installation instructions and the download link for the HTML5 app are given below:

1. On your iPad, visit: https://pnlhd.openf.in/app/pnlhd.html.
2. Tap on the install button.
3. Follow the 3-step instructions to install the mobile app.

In my last post, I outlined why HTML5 is a good platform for developing mobile financial apps. The key advantages that HTML5 provides are summarized below:

1. HTML5-based financial apps work cross-platform and a single mobile app lets you support clients across all mobile platforms (you might need to optimize the mobile app to counter differences like screen sizes on different devices).
2. HTML5-based financial apps let you take control of mobile app support, enhancing reliability, as you don’t have to depend on the platform provider (Apple store) for support.
3. HTML5 mobile apps provide a very strong visualization interface that supports native user experience, making financial data far more intuitive.
4. HTML5 mobile apps can be instantly deployed and updated in real-time, allowing you to constantly add new features and differentiate from competitors.
5. HTML5 mobile apps are just as powerful as native apps, providing optimal performance required for financial apps.
6. HTML5-based financial apps are secure, if HTML5 specifications are used in conjunction with security best practices.

HTML5 Tags & How They Aid Financial App Development

This section explains the HTML5 features we used, how they were used and the advantages they provide.

HTML5, not HTML:

The first step is to inform the mobile browser that the financial app is HTML5-based, and not HTML-based. The way to do this is to include the HTML5 doctype.

The valid doctype for HTML5 is <!doctype HTML>

<!DOCTYPE html>
<html>
<head>
<meta charset=”UTF-8”/>
<title>PNL HD Financial-App</title>
<head>
</html>

Unlocking storage

One of the biggest hurdles developers of financial apps face, is the limited storage space available for mobile apps. Financial apps need to store data for a multitude of reasons such as updating security quotes and news. It is often inefficient to store such data on a server.  Fortunately, the HTML5 specifications contain a standard for local storage which is supported by browsers on all mobile platforms.
There are two types of storage available for the client code in HTML5, local storage and the SQL database:

1. Local Storage:

   Local storage is a simple key-value store that supports only strings as both keys and values. Local storage can be manipulated using two basic operations, set and get, as shown below:

   //To save an item into local storage
   localStorage.setItem(key, value);

   //To get an item from local storage
   value = localStorage.getItem(key);

   In our financial app, we used this to store application installation keys, session information and user preferences. It is limited in size to 5mb on iOS.
   
   

2. SQL Storage:

   SQL storage is a light SQL database. It generally occupies 5Mb, but subject to user permissions, it can occupy up to 50Mb. We used this database to cache app data, dynamic image assets, and user preferences. It supports all of the CRUD operations.

Making the application work offline

For financial apps, functionality gets reduced if the user does not have a constant connection to the Internet. However, applications should not fail completely because the user is not connected to the Internet. Imagine financial apps not displaying your portfolio, just because the mobile app is offline.

The manifest enables financial apps to work in offline mode. It is very easy to use but you must make sure all static assets are listed in your app.manifest file and that the manifest is referenced in your .html file before the tag:

<html manifest=”pnlhd/pnlhd.manifest”>
The assets listed in the manifest file must not exceed 5Mb in total.

There’s another advantage to this, and that is speed. As financial apps have to be functional even offline, the HTML, JavaScript and CSS are all cached. This ensures that the mobile app is as fast and powerful as a native app.

Using the canvas tag

Canvas is a very simple pixel-based drawing API, but if used the right way it provides scripts with a resolution-dependent bitmap canvas, which can be used for rendering graphs or other visual images on the fly.

To use the canvas tag, you’ll need two things:

1. A Canvas tag in the HTML to place the drawing canvas
   <canvas id=”IntradayChart” width=”200″ height=”200″>
   </canvas>JavaScript to do the drawing
2. <var drawingCanvas = document.getElementById(‘IntradayChart’);
   // Checking that element is in the DOM and that the browser supports canvas
   if(drawingCanvas.getContext) {
   // Initialize a 2-dimensional drawing context
   var context = drawingCanvas.getContext(’2d’);
   //Canvas commands go here
   };

In the mobile app we developed, we needed to manipulate existing images (which were returned as a result of the web service calls). External images can be loaded using the drawImage method.

context.drawImage(imgObj, XPos, YPos, Width, Height);

After the image has been loaded, you can make manipulations like pixel manipulation and drawing text to the canvas, all of which make rendering of financial data more intuitive.

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.”

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”.

There is now an emerging trend towards “suit-to-fit” internal custom applications that focus on the unique requirements of various departments within a firm. These applications are often fueled by on-demand market data delivered over the cloud. When executed well, this combination delivers superior workflows that suit the firm’s exacting needs, while also reducing overall market data spend.

Why are market data terminals out of step?

Market data terminals don’t align with the evolving business needs of investment management. Terminals target the fat part of the bell curve, but as firms increasingly look to differentiate themselves with new strategies their needs become more unique, the curve flattens, and terminals become less relevant. In addition, in terms of data management, firms are moving towards a holistic and scalable approach that provides increased consistency and transparency, leaving behind legacy market data silos.

Of course many firms have been working on this challenge for years now, creating in-house data management solutions to serve the needs of internal and external constituents. When these systems take hold, it enables firms to focus on improving internal workflows, from pre-trade analysis and trading, to reporting and compliance. As custom applications for each of these areas are developed, it decreases the need for market data terminals.

Another important factor to consider is the outmoded pricing structure of market data terminals. The recent economic downturn provided a catalyst for firms to re-examine the value terminals provide. While vendors have added a wide range of datasets to their terminals over time, that data comes at a steep price. Subscription costs for industry-leading market data terminals now typically run from $10,000 – $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

With emerging technologies, this pricing structure is likely not sustainable as it benefits the entrenched business models of market data vendors rather than their customers.

The rise of custom on-demand applications

One of the key benefits of new internal data management systems is that firms can add a layer of custom proprietary applications to enhance a wide range of workflows, including research, portfolio management, trading, compliance, reporting, and more. With today’s advanced technologies and cloud computing, it’s easier than ever to develop in-house applications that replicate or surpass the analytical capabilities provided by market data terminals.

Take for instance the integration of market data. In the past, incorporating market data into proprietary applications was a massive headache, requiring the time-consuming parsing of antiquated data feeds and flat files. With a cloud-based approach comes flexibility. Data is available instantly, pulled in from the cloud via web APIs with just a few lines of system-agnostic code. No extra infrastructure required.

Also underpinning the trend towards proprietary applications is the very real cost savings versus market data terminals. Instead of an exorbitant terminal fee for every user regardless of their needs, on-demand market data delivered over the cloud is based on actual usage. This means that custom apps and portals designed to a firm’s exact requirements can result in much lower overall market data spend.

What does the future hold?

There’s no doubt that market data terminals will continue to have a place in the market data ecosystem for the foreseeable future. However, as firms differentiate with new strategies and emphasize the preservation of their margins, they will increasingly look beyond terminals to the efficiency and custom fit of proprietary applications fueled by on-demand market data from the cloud.

This is the third post in our “Top 5 Investment Management Technology Challenges Addressed by the Cloud” multi-part blog series. Be on the lookout for our next post, “Creating branded, data-rich mobile apps that differentiate.”

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HTML5-based iPad App

Advantage #1: One version of the financial app caters to clients across multiple platforms (iOS, Android, Blackberry, Windows etc).

HTML5 is a web-based, cross-platform specification. A de facto requirement for any modern mobile operating system is the inclusion of a HTML5-compliant web browser. All the leading mobile platforms use HTML5 as their base. This offers two distinct advantages:

1. If financial apps are developed on HTML5, there’s no need to develop individual versions for the various platforms. This saves resources, both in terms of time and money. (Of course HTML5 developers will still need to account for the different form factors and screen sizes as they build cross-platform apps.)
2. As HTML5 apps are web-based, they can be accessed via a mobile device, laptop or desktop. This ensures that clients are offered the same interface across all devices.

Advantage #2: HTML5-based financial apps provide 24-7 reliability.

Financial apps need 24-7 reliability. There should never be a point in time, when a user can’t access the app.

The advantage HTML5-based financial apps provide in this regard is two-fold.

1. There is one centralized database, and if a problem arises, it can be tracked and resolved.
2. Also from a reliability point of view, HTML5-based financial apps lets you take care of the support yourself and not rely on the platform provider.

Advantage #3: HTML5-based financial apps provide a strong visual interface.

The new HTML5 specifications have a very strong charting interface.  The best way to describe data in financial apps is by means of charts. HTML5 facilitates this need. The primary reason Internet usage has grown exponentially on smart phones and tablets, is the user experience these devices offer.

Charts and graphs are far more intuitive when viewed on mobile devices.  HTML5-based financial apps offers features such as the ability to zoom in and out of charts or select particular data points by touching the screen, which is unique to mobile devices.

Advantage #4: HTML5 specifications let you employ an agile development process.

One of the primary problems with native apps is the approval process that platform providers have in place. The process can be tedious and time-consuming. The same issue arises when new features need to be added to financial apps. This kills any differentiation advantage you might get from being first-to-market.

HTML5 apps let you subvert both issues, as HTML5 apps are web-based and therefore require no approval.

Advantage #5: HTML5 specifications provide the functionality a financial app requires.

Native apps offer much more control over the device, but the difference is access to additional device features such as camera and additional memory. These features are nice to have, but enterprise apps, especially financial ones, generally don’t require access to these features.

Primary financial app use cases are requirements like updating price quotes, charting and pulling research and news. These can be handled efficiently in HTML5-based financial apps.

Advantage #6: HTML5-based financial apps are secure.

HTML5 is just a specification for rendering pages on the web.  Thus it offers the same level of security, as any Internet-based application would. Apps that closely follow the HTML5 standard can be made to offer the latest security.

The major causes of concern in HTML5-based financial apps arise from using features such as cross-document messaging, geolocation and auto-complete. Such features generally don’t add to the usability or power of financial apps and thus avoid any related security concerns.

Now that I have outlined why HTML5 is an excellent platform for developing financial apps, in my next post I will provide step-by-step instructions on how we developed a HTML5-based financial app (P&L Tool) with our friends at OpenFin. This app will demonstrate the ease and speed with which a powerful HTML5-based financial app can be developed.