TP ICAP forged ahead with the expansion of its data and analytics offering in 2019, outperforming the market as it rolled out a broader suite of products.
The firm’s status as the world’s biggest over-the-counter (OTC) derivatives broker has underpinned the growth and development of its data and analytics division and placed it in the box seat when it comes to the provision of data.
Over the past 12 months it has made a series of new launches to augment its position as a provider of analytics and solutions, helping it to grow at double the rate of the rest of the industry. Last year the division grew revenues by 11%, compared with 5.4% in the wider industry. That momentum has continued into 2020, with first half revenues climbing 9% as the products it developed last year began to gain traction.
Eric Sinclair, CEO of TP ICAP’s Data & Analytics division, says: “We are moving up the value chain in terms of what we do for our clients. Rather than just being a provider of proprietary data, we are combining that with content from third party data providers to create information products.”
Jonathan Cooper, global head of sales for the division agrees. “We want to be a trusted adviser to our clients; not simply here to facilitate a transaction.”
TP ICAP’s Data & Analytics division already has over 20 data partners, drawing on expertise to provide more insights for its clients. “We may be the best source of OTC content, but someone else might be a great source of reference data or they may have some other form of content related to the same instruments on which we want to provide solutions. It’s one of those situations where one plus one equals three,” says Sinclair.
This approach led to the June launch of the firm’s Bond Evaluated Price Service, a new bond pricing tool launched in response to demand for more transparency around the pricing of fixed income instruments.
Chris Dearie, deputy CEO of the Data & Analytics division, says his team worked with a small group of its clients to find a solution to this need. “The Bond Evaluated Price Service is driven by a whole range of different statistical analytics that we can apply to that data. We are able to provide greater insight integrating trade data and order data, allowing us to create a much deeper product.”
TP ICAP’s strategy is to use its status as broking intermediary and leading provider of OTC content to provide clients with more relevant and timely data, and overlay it with increasing levels of analytics. In July, it launched NDF Premium, which offers an anonymised non-deliverable forward (NDF) feed of orders and matches from Fusion, ICAP’s hybrid electronic platform, capturing both electronic and voice liquidity pools.
With more clients looking to use cloud-based services — a trend that has accelerated since the Covid 19 crisis — to reduce access costs and gain flexibility, TP ICAP has become increasingly agnostic about how it delivers its data and analytics solutions to clients.
“We are exploring ways of reducing the total cost of ownership,” says Cooper. “If clients want us to use a big platform, we’ll meet them there. If they want to come directly to us, we can facilitate that. If they want to meet us in the cloud, we will.”
At the same time, the firm is responding to clients’ needs to have more direct access to data. To that end, it launched an aggregated market data API (an application programming interface, the software used to let independently produced bits of software interact) called SURFIX, which brings together all of its brands in a way that allows easy and direct ingestion by clients.
The business has also done a lot of work around risk-free rates and helping its clients transition from Ibor rates to new benchmarks.
Dearie says TP ICAP will look to produce analytics to meet the growing need for end-to-end solutions: “The work we have done in providing customer-led solutions around things like Bond Evaluated Pricing creates a really good stepping stone to move into further and more complicated solution-type areas. [We are] looking at risk management, and at pre- and post-trade analytics to see what the opportunities are there.”
