Google Cloud is the latest cloud provider to launch a data exchange for financial services as information consumption on Wall Street continues to evolve.
The tech giant announced the launch of Datashare, a marketplace for financial-data providers and their consumers to connect in a more streamlined way. The new offering comes as banks and hedge funds aim to improve their ability to organize data and apply advanced analytics backed by machine-learning techniques, all within the public cloud.
The exchange operator CME Group and the data giant Refinitiv were early adopters of the marketplace. The data publishers OneTick, which houses a large repository of historical tick data, and Accern, which focuses more on environmental, social, and governance and alternative data, have also signed on.
It took Google Cloud about 18 months to launch Datashare, Christin Brown, the firm's head of global financial-services-industry strategy and solutions, told Insider.
Much of that time was spent engineering the pipes that automate the transformation of data submitted by providers. The process includes standardizing various data sets into a uniform format so consumers can analyze and handle data across providers in a consistent way.
That "secret sauce" was the heaviest lift from an engineering and software-development perspective, Brown said. The data transformation takes place automatically at the time of ingestion into BigQuery, a data warehouse that also offers analytics and machine-learning tools.
Wall Street is increasingly turning to data exchanges
Google Cloud is not the first, and likely won't be the last, tech company to create a data exchange for Wall Street.
With banks' and hedge funds' reliance on data increasing, firms are recognizing the benefit of a third-party venue that can consolidate and standardize the various data offerings in the market.
Amazon Web Services launched AWS Data Exchange in November 2019, which allows users to find and subscribe to third-party data and then load that data into Amazon S3, a cloud-based data-storage service where they can use cloud services and tools.
Meanwhile, Snowflake unveiled Data Marketplace in 2019 and has onboarded more than 500 data sets from over 140 third-party data providers, according to its website.
That said, Google Cloud is hoping a few key features will lure in data users and providers despite the competitive landscape.
Allowing data consumers to trial different data sets before committing to a multiyear subscription is one differentiating feature, Brown said. Hedge funds that deal with more "exotic" data can experiment in BigQuery without longer term commitments, she added.
And while the concept of "try before you buy" isn't novel, it's not always a viable option for some small and medium-size data publishers.
For consumers, all of the license terms and agreements for each individual publisher are centralized and managed through Google Console by the publisher, as opposed to having to be handled internally. The user sees only what they are entitled to by the provider, meaning they won't violate license terms.
Batch and real-time data-sharing capabilities for data publishers have also been combined to accommodate end users.
All of it speaks to the evolution of data usage on Wall Street and the increased popularity of nontraditional information.
"Market data is not just literally data from the markets," Brown said, adding that Wall Street is realizing the same model and distribution channels that capital markets used to rely on won't cut it anymore.
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