In 2018, Thomson Reuters agreed to a deal to spin off its Financial & Risk business—the division that includes its financial content and technologies—to a consortium led by private-equity giant Blackstone Group. Soon thereafter, they renamed the unit Refinitiv—and it’s that name change that could potentially cost a lot of time and money for clients of the data and tech company.

Refinitiv recently released a product change notification to separate Thomson Reuters (TR) from Refinitiv on an API level. This rebranding effort will require customers of the Elektron SDK and certain functions pertaining to the Robust Foundation API (RFA) to recompile, test, and redeploy those applications, removing any embedded references to Thomson Reuters. Refinitiv will cease support for these APIs by the end of July 2021. [See Box at the bottom of the page for a list of APIs that will need to be rebranded.]

“Post July 2021, both re-branded and non-re-branded versions of the API will continue to connect to Refinitiv Real-Time without data interruption,” the notification reads. “However, no support will be available for the old versions; any new features or fixes (including emergency fixes) will only be done on the re-branded versions; therefore, it is strongly recommended that customers move to re-branded versions of each API to retain support.”

While at face value, this might seem like a simple changeover, end-users are worried that this could be a costly and time-consuming project that provides no added value, at a time when firms are under a fair amount of pandemic-related stresses.

One head of market data at a large European bank called the rebrand “bullshit,” and “a waste of everyone’s time and effort”, noting that “Everyone has bigger fish to fry. … There’s nothing in the notification to justify the change from a consumer’s perspective. Do they think the market has nothing better to do?”

It’s impossible to put an exact cost on a rebrand project like this for a bank or asset manager, since affected firms vary in size, usage—both by traders and by applications—as well as technology staff available, and other resources, such as automation tools, which could potentially ease the transition.

But clearly such a change doesn’t come without an associated price tag in terms of cost and time. And given the urgency of compliance, it’s particularly surprising that not all clients seem to have yet been informed about the changes. Some sources contacted by WatersTechnology were shocked by this announcement, while others were still awaiting full details, and others claimed to have not been informed at all.

A market data executive at a large US bank says that the drain on resources and time will be in the testing, rather than actual development work. “Nobody wants to make a mistake, because these APIs are critical to the business, so they’ll test them very carefully to make sure the pricing [coming into the applications via the APIs] is correct, and maybe do some performance testing,” they say.

For Refinitiv’s part, the company does not believe that this project will be especially onerous for users, calling this upgrade “standard industry practice.” 

“Refinitiv is continually launching new and enhanced services to support our customers through their digital transformation programs as they address today’s rapidly changing financial markets,” says a spokesperson. ”As the technology evolves, we regularly update our software to simplify and enhance our product portfolio. Our aim is to provide customers access to our leading data and capabilities in a more modern, consistent and secure distribution mechanism. Upgrades such as these are part of standard industry practice. In line with industry norms we help customers implement these changes by giving them one year’s notice and providing full support.”

The vendor did not explain what kind of support they would offer to help firms complete this switchover on time, or if they intended to lower prices to help customers defer some of the cost.

The spokesperson adds that this is “part of a broader program to meet [Refinitiv’s] legal obligations under the separation from Thomson Reuters,” and not caused by any due diligence activities resulting from the London Stock Exchange Group’s bid for Refinitiv, and that they “have been communicating these changes to [Refinitiv’s] customers since the summer to give them ample opportunity to respond.” They also reassure users that firms that continue to use the old version will not face any liability from Thomson Reuters.

Time for a Switch?

While Refinitiv feels that they have given users ample opportunity to respond, the sources that WatersTechnology spoke with say that this caught them off guard. In extreme cases, this rebrand could prove costly for Refinitiv.

Another head of market data at a large Asian bank said that they’d actually consider switching off of Refinitiv to a competing vendor. “That’s a lot of expense for a company to re-code and do regression testing. And if you’re going that far to change the API, would you maybe want to [switch to] a different API,” they say, specifically citing New York-based data technology startup Pegasus Enterprise Solutions as a potential replacement. “This will be an opportunity for [companies like Pegasus] to do this—these types of issues are great sales events for these companies.”

While in the past, Refinitiv might have naturally worried about a disruptive change prompting clients to switch to direct competitors like Bloomberg, FactSet, or S&P Global Market Intelligence, the evolution of open platforms, abstraction layers and APIs, and the increased acceptance of cloud and web services mean that there are other options available to clients that want a best-of-breed data architecture but want to avoid vendor lock-in.

For example, Activ Financial last year released a set of tools, dubbed Enterprise Data Integration Suite, to help firms migrate away from complex, legacy data platforms such as Refinitiv’s Enterprise Platform (formerly known as TREP), while SIX has partnered with Xignite to distribute the Swiss vendor’s market and reference data via Xignite’s new suite of microservices, and tech giants like Amazon Web Services and Google Cloud Platform are both making moves into the market data distribution space. Meanwhile, others such as Pegasus and BCC Group provide platforms and integration tools that allow firms to simplify their architecture and to more easily combine their chosen datasets from different providers—potentially including Refinitiv.

One challenge of displacing any vendor is finding equivalent data elsewhere: you may be able to find 85% of the content you get from Refinitiv (and possibly cheaper) from other providers, but it’s the remaining proprietary content that isn’t available via free public or other vendor sources that poses a challenge. You may still need to source that from Refinitiv, though you may now be able to source only the “essential” data that you really need, without also being obliged to purchase the vendor’s full feeds or data platform.

Another challenge is technical: the Enterprise Platform powers datafeeds over Refinitiv’s Elektron infrastructure that power many different desktop and server-based applications, and un-integrating all those connections poses a daunting task—not to mention a source of potential risk—for firms already balking at the prospect of an API change. A longer-term move towards adopting open-source APIs would not only eliminate reliance on some proprietary technologies and reduce instances of “sticky” platforms that promote vendor lock-in, but would also greatly reduce the risk of similar branding issues occurring.

However, while many firms grumble and threaten displacement projects, few actually have the time or stomach for potentially large, untested projects that may increase short-term costs.

Douglas Taylor, founder and managing partner at Douglasbtaylor International Consulting, who has more than 30 years of experience in the capital markets, including a 15-year run at Thomson Reuters that ended in 2003, says that while this does provide a chance for users to evaluate alternatives, “most companies using data don’t want to make big changes. If they can get the data they need from Refinitiv, and it is performing well, they won’t want to change,” noting that client retention rates in this area are typically in the high-80% range. “So risk exists, but maybe it’s not significant risk.”

To sweeten the deal for inconvenienced customers, Refinitiv “may have to make some pricing changes to retain clients in the face of competition,” Taylor says. “They’ll just try to get it done as painlessly as possible for clients.”

Missed Opportunity?

Another consultant describes the rebrand coming now as “pretty crazy,” adding that Refinitiv should’ve used this as an opportunity to present this change as “part of a continued innovation” process. Had the vendor begun to act on the issue earlier, with more time to incorporate functional changes, it could even have made the API change an opportunity to use the changes to begin a longer-term shift to a more API-led data services architecture, others say.

The Refinitiv spokesperson says that the vendor does, in fact, view this as an opportunity for users to improve their connection with the vendor. “Many of our customers use stable but legacy versions of our software and this is an opportunity for them to benefit from an enhanced service, better security, and a better customer experience.”

The reason this simple name change is such an arduous process is because of Refinitiv’s scale inside a bank or asset manager. To better understand the challenge, WatersTechnology spoke with the CEO of a vendor that does not compete with Refinitiv to see how this process can look in motion.

“It’s a huge inconvenience,” says the source. “An application that everyone uses but hasn’t changed in forever that uses a Thomson Reuters API to get data—now a developer needs to be assigned to go comb through the source code and find any places they call a TR API and replace it with the identical Refinitiv API. Then they need to test it. Then they need to have the quality/assurance department test it more and make sure nothing broke by accident—regression testing. Then it needs to be deployed (to users, servers, whatever) and monitored to make sure it didn’t break anything. Multiply that by a bunch of applications, a bunch of which are on production systems in sensitive environments (back-end data processing systems or whatever) where any change, no matter how seemingly trivial, could cause ripple effects. And—for what? Absolutely no value at all. Just to switch an API call from com.thomsonreuters.blah.blah(fetch data) to com.refinitiv.blah.blah(fetch data).”

A third consultant agrees with this assessment, adding that there could be unforeseen issues that will arise as these APIs could feed into systems that might not seem directly related.

“This name change becomes an issue in clients’ inventory systems and across the administration process as the names moving from TR to Refinitiv have to be updated and match,” the consultant says.

Specifically, data being pulled via an API must match the details of contracts and entitlements held in firms’ inventory and permissioning systems, and must also be updated (if they haven’t already been) to reflect the source as Refinitiv, rather than TR.  

“Similar to the APIs, someone is going to have to go into each system and change TR to Refinitiv: client product databases, approval systems, inventory system, invoice system, reporting, account payable system through to the general ledger. I don’t think [this process on its own] will drive people to look at alternatives, but it will be a lot of work.”