Buy-side Usage of Level 3 Data Analytics for Algorithmic Performance

In Q4 of 2020, WBR Insights and BMLL surveyed 100 Heads of Data, Chief Data Officers, Data Scientists to discover how buy-side participants are currently using predictive data and analytics to help inform their everyday trading decisions to improve their alpha generation and to mitigate risk.

As the world starts to look ahead to emerging from the economic impact of the COVID-19 pandemic, the next  12-18 months will be critical for all financial services firms looking to embrace data and analytics. 

Our survey found that:

• High quality data has become a commonly utilized commodity by most market participants - 74% of respondents say they use Level 3 data in their research program

• Of the respondents not using Level 3 data in their research programs – nearly 75% said the main reason was its inaccessibility

• 64% of respondents said that at least 50% of their investment in new data and analytics capabilities will be from buying-in these capabilities

• 41% of respondents saying that they will increase their budget allocations significantly for third-party data as a key element of their quantitative research

• Over 80% of respondents said they are already are or very likely to embrace cloud for their data and analytics generation and processing over the next 12 - 18 months