If you’re like me, when you hear the word “cowboy,” you likely think of Clint Eastwood in The Good, the Bad and the Ugly or Unforgiven; John Wayne and Jimmy Stewart in The Man Who Shot Liberty Valance; or Gary Cooper in High Noon. In Wall Street parlance, these are the front-office traders and portfolio managers.

But a real cowboy is someone who herds and tends to cattle. The reality is not quite as sexy as Paul Newman and Robert Redford single-handedly taking on the entire Bolivian Army, but they (the cattle rustlers, not Paul and Rob) serve a vital function that helps power the American economy. At trading firms, these cowboys (and cowgirls) are your market data management professionals sitting in the back office—not the sexiest of functions, but essential to a company’s bottom line.

This is why people are leaving consumer firms—consultants can suck up the void, and market data will get more expensive for consumers. I’ve been preaching this for years and it continues to fall on deaf ears.

A long-time market data manager on the buy side

As Max Bowie recently wrote, there’s a growing talent gap in the market data management space. To distill his 2,400-word story down to a few sentences, many data professionals at banks, asset managers, and vendors are aging out of the workforce, and there’s not enough younger, well-trained talent when it comes to the nuance of data management. Think of it like Japan’s aging population problem. Data procurement professionals, data scientists, and quants are in high demand because the ROI to the front office is more easily quantified. But as one bank executive told Max, data management is about so much more than procurement and analytics—and ignoring that fact comes with a cost.

“It depends on your liabilities and, for example, the number of users of applications with access to the data, but fines by big vendors can be significant—they can run into the millions of dollars,” the exec said. That’s why it’s so important to have trained and experienced professionals who know to monitor for—and who understand the impact of—any policy changes to data licenses that could result in higher fees.

That article digs into the nitty-gritty of data management—again, you can read the full article here—but for this column, I’ll address some points that were brought up to Max after the article was published.

One market data professional who has worked at two very large asset managers for more than two decades put the problem solely at the feet of C-level decision-makers.

“There’s a lack of interest in what market data people have to say. Whether you’re informing [senior management/portfolio managers] of cheaper data choices, warning them about data compliance issues, asking them for training budget, or asking HR to find you industry-knowledgeable staff, basically you are treated second class by many firms,” they tell WatersTechnology.

“If a data-consumer firm wants to hear about market data strategy, they pay a small fortune for an external consultant to come in, [and they] repeat the same message that the company’s own market data people have been telling them for ages. And this is why people are leaving consumer firms—consultants can suck up the void, and market data will get more expensive for consumers. I’ve been preaching this for years and it continues to fall on deaf ears.”

So perhaps it’s not so much a problem of increasingly sparse talent, but a retention problem. They say that at asset management firms, the demands of the job are “unrealistic”, as senior management often asks market data managers to cut their costs, but they don’t tell the business owners that this cost-cutting is happening. Those who manage vendor accounts get caught in the middle because the trading desks and risk managers don’t want to substitute what they’re using for lower-cost alternatives.

Additionally, they say, there’s a lack of career progression. “Unless you are a big consumer firm, you usually have two to four people looking over the total spend of market data for the whole firm. Vendor managers rarely can then grow within their field, and if they are ambitious, they move on to a bigger firm or different role outside of market data.”

And even though market data tends to be the third largest cost center for a trading firm, behind only staff and office space, there’s a lack of investment in its management. “I see many firms don’t even have a proper market data inventory system,” they say. “Management thinks a general procurement tool is good enough! They are clueless and refuse to change their minds due to their lack of interest and understanding.”

They exist…does anyone care?

Another market data professional with almost 30 years of experience echoed some of these points but scoffed at the idea there aren’t enough market data professionals in the industry—they exist, but banks and buy-side firms are unwilling to pay for that talent.

“When I saw the headline about [a] ‘data brain drain’, I wasn’t sure if I should cry or laugh. I see absolutely no shortage of market data professionals, but rather firms looking for excuses to offshore as much of their market data management as possible, regardless of consequences,” says the second source.

“It starts with grossly incompetent management in some firms. At one well-known hedge fund, they split MDS (market data services) into a couple groups that don’t talk to each other, and where bad managers have driven out what little talent they have left.”

They don’t care what we can do for them; they want someone who looks like them. And HR screening doesn’t help.

Market data specialist with three decades experience

They say that a very large bank they worked with moved many market data positions across the Hudson River to Jersey City, NJ, adding a massive pain-in-the-neck commute for those who live in one NYC’s five boroughs. Another company moved many of its market data positions to a suburb north of Manhattan. Maybe that’s not so bad if you live on Park Avenue and are close to the Metro North railway, but it’s my guess that not many market data professionals can afford that rent.

“And then there’s ageism,” they say. “Many firms only want youngsters, both because they can be paid a lot less and because they don’t like older workers.”

The source laments about seeing the look of disappointment “in the eyes of hiring managers half my age” when they see the white in his hair. “They don’t care what we can do for them; they want someone who looks like them. And HR screening doesn’t help. At some firms, HR has all sorts of tricks to eliminate candidates: having to pick the exact salary range (though that should end in NYC next month); requirements to put in what year you graduated college; checking your LinkedIn account for too many years of work; not having all the right buzzwords in a profile or resume. These recruiters don’t want to hire—they just want to whittle down resume stacks.”

They say that while there’s little out there to entice new people into the field, there are “piles of good people practically begging for positions.”

“And what many of us have is the understanding that this is not just a paper pushing job, but requires business, tech, accounting, contract, compliance, and vendor risk management knowledge among other things. Kids fresh out of school don’t have most of that. And you have to offer decent pay to those who do, but lots of firms put little value on these skills, though they are often willing to pay outsourcing firms a lot more. … A good data governance department working with a good MDS team will know what data is coming in, and how it’s used and distributed. They help each other. And when vendors or exchanges do audits, the firm is well prepared. But this is beyond rare.”

The overlooked

I’m going to piggyback and try and expand on what that last source said. I’ve written about this before—though not necessarily about market data management—but banks and buy-side firms often limit themselves when it comes to talent acquisition. As to what that previous source said, “[Executives] don’t care what we can do for them; they want someone who looks like them.”

Go to any industry conference—especially those focused on data, and even those run by WatersTechnology—and when you look at who is speaking and when you look at the faces in the audience, it tends to be a sea of white, male faces. I can’t speak for other conferences, but I know for a fact that our events team really does try and get people with different backgrounds as speakers. The problem is that the pool of available senior-level decision-makers that want to speak on a panel and have been approved by their organizations to provide their thoughts to a room full of colleagues is limited. And, quite frankly, it can be tough enough to find white males—much less women and people of color—who fit that bill.

While there are lots of stats and studies about the lack of women and/or people of color in the STEM fields—science, technology, engineering, and mathematics—I do not have any actual stats to prove that in the market data management field, women and people of color are underrepresented. What I do have is 13 years of reporting experience, which includes literally thousands of interviews and attending hundreds of events. Max Bowie has spent more than 20 years covering this field, and his focus has been almost exclusively on the market data space, and he’s seeing the same things I am. (And yes, Max and I are both white men, but I can at least say that six of our eight reporters are women, and two of those are people of color. Save your sabers for someone else…though I guess I’m guilty of going with just “cowboys” in the headline and lede.)

Max’s story also reminded me of a story that Reb Natale wrote last year, which looked at programs being run at Bank of America and HSBC that actively seek out people who are neurodivergent to help bolster their cybersecurity teams. Like in market data management, there’s also a shortage of talent available in cybersec—about 3.5 million professionals, according to one estimate.

“Cybersecurity is one of those disciplines where you have to be deeply technically skilled, and you have to know the whole stack, end to end, from the software level right down to the hardware level in order to do it properly. There are very few people who have the patience to really do that, so one of our suspicions is that people within cybersecurity are more neurodiverse than not,” Jonathan Scott-Lee, HSBC’s chief information security officer for the Asia-Pacific region, told Reb. Scott-Lee has attention deficit hyperactivity disorder and has been diagnosed as having Asperger’s.

While those skillsets that Scott-Lee describes blend nicely with cybersecurity, they also pair well with market data management. The problem is that for some people who are neurodivergent, interviewing can be a challenge, fitting in on teams can be difficult, and they may not be as practiced as neurotypical individuals when it comes to advocating for oneself. As a result, they often get overlooked or dismissed outright. But they have the talent for the job.

After reading Max’s article and the feedback that came in after it was published, my takeaways are these: there clearly is a talent “brain drain” when it comes to market data management; the blame is largely due to management decisions to outsource and/or not provide avenues for advancement (and pay raises); those high-paid MDS professionals have done a poor job of training the next generation of market data executives (yes, money has been cut and jobs outsourced…still, you can do a better job of training); banks and buy-side firms are too short-sighted to invest in procurement and data science, but the long-term health of an organization will rely the professionals and platforms that do these functions; and these same firms shoot themselves in the foot when the hire only people “that look like them”.

None of these takeaways are profound or necessarily unique to market data management—but it’s a pressing problem for the industry that needs addressing. As our first bank executive noted, this lack of foresight comes with a real-world cost somewhere down the line.

The image accompanying this column is “My Bunkie” by Charles Schreyvogel courtesy of The Met’s open-access program.