Mastering data partnerships: A strategic guide for financial information leaders

When you’re one of the world's leading financial data providers, serving the biggest distributors and platforms globally, your data strategy is paramount. Your clients demand a financial dataset that's not just comprehensive, but also impeccably accurate and extensive. While building these datasets organically might seem like the obvious path, there's another strategy worth considering: strategic partnerships.

By collaborating with established market experts who are already collecting this valuable information, you can gain an instant competitive edge while saving on setup time. These mutually beneficial alliances boost your data offerings while building an even stronger value proposition. In today's data-driven financial landscape, mastering the art of data partnerships could be the key to staying ahead of the curve.

How to evaluate the potential (and perils) of partnership

But what looks like a pretty simple exchange – I send you data, you send me data, and we are both better off – needs to be carefully managed. With years of experience as a data company, FE fundinfo has partnered with various suppliers, vendors and platforms, and we’ve seen how even the most experienced companies struggle and fail when they select the wrong partners or fail to carefully evaluate their selection criteria.

Over our many years of experience, FE fundinfo has cultivated strong partnerships with a diverse array of suppliers, vendors and platforms. The experience has given us firsthand insights into the potential – and pitfalls – of data partnerships. We've seen even the most seasoned companies make mistakes when it comes to partner selection. And we’ve seen clearly: the key to success lies in careful evaluation.

So let’s do a sense check – when considering a data partnership, do you keep these criteria in mind?

Commitment to Quality:

You want to ensure that your data partner shares the same values and integrity levels when it comes to quality of the data, as you would not want to consider partnering with someone with data that is incomplete, out of date or incorrect. It stands to reason that it’s in your best interest to select the partners who represent not only the best on the market, but whose data standards align closely with your own.

Appropriate Coverage:

If you knew it would result in clients querying your services, would you partner with someone whose data has considerable gaps and missing information? It’s important to discern what “good” coverage looks like. The fund data landscape is often patchy, comprising many local data sets that only apply to certain legal structures or asset types. Consider what you and your clients truly need and which potential gaps are acceptable or even expected.

Data Segregation/Storage:

Whatever data you exchange, make sure you understand how the data is stored in the partner’s system, and how you store and segregate the data received in your own. Whether or not you merge with the partner, you may be expected to keep the data sent directly separate from the data collected through your partner.

Licensing and Usage:

Think about receiving the same information via different channels, each with different usage rights, terms and conditions and licencing restrictions. How will you deal with this? Is your data model ready to capture this? Can your support team correctly triage requests? Will your CRM system bill your clients accurately?

Adaptability:

When establishing a data exchange, it's crucial to create processes that are both stable and flexible. Initial setups should be robust and must also accommodate future technical developments - even those you can't foresee. Changes in infrastructure, data hosting methods or modifications to data architecture on either side can significantly impact the exchange. Anticipate these potential shifts to avoid last-minute crises or hasty fixes. Building adaptability into your systems from the start supports business continuity in the face of changing circumstances.

Regulatory Resilience:

We are all witness to the financial industry’s ever-increasing regulatory changes across markets and instrument types. Whether you're supplying or consuming data, you must be prepared to adapt swiftly. You'll need to meet not only your clients' expectations but also your partners’, responding promptly to any required changes - be they technical or data-related. Both parties should expect to stay current with regulatory challenges and capture relevant information by mandated deadlines. A mutual commitment to regulatory resilience strengthens partnerships and ensures smooth operating even in the face of change.

The key ingredient: trust

When evaluating our partners, we carefully review the combined value the partnership brings to our partners and ourselves. Many of FE fundinfo’s partnerships were established years ago, and we are consistently evaluating new data partners. Built on trust and collaboration, our relationships are long lasting and help both parties deliver better service to our clients.