Diversification strategies are driving growth in U.S. Exchange Information Services businesses with revenues reaching a record $3.7 billion in 2019 according to a Burton-Taylor International Consulting (part of TP ICAP’s Data & Analytics division) report published recently.
The new report provides an in-depth analysis of each major U.S. exchange’s information services business, focusing on exchange market data revenues for equities, options, and futures.
U.S. exchanges are broadening the array of products offered as part of their information services businesses, enhancing traditional market data products by offering Investment Analytics and Index products to support client needs. Although Market Data & Feeds revenues rose by 6.7% in 2019, Investment Analytics and Desktop product revenues surged 18.9%, while revenues in the Index segment jumped by 13.3%.
Other key findings include:
- Total Market Data revenues reached $2.0 billion in 2019 on strong growth in fixed income and options data products which increased by 148.3% and 14.0%, respectively.
- Equity market data revenues increased just 1.1% in 2019, with SIP tape revenues increasing 0.5% and proprietary product revenues increasing by 1.9%.
- Index segment revenues grew to $475.8 million in 2019, up 13.3% from 2018 as the continued shift to passive investment strategies brought the 5-year CAGR to 16.5%.
- Investment Analytics & Desktop revenues increased 18.9% in 2019, with rising demand for analytics offsetting a decline in desktop-related sales.
“U.S. exchanges are clearly focused on expanding the breadth of data and information products they offer to clients,” says David Tabaka, analyst at Burton-Taylor. “They are diversifying beyond traditional real-time market data products and expanding their offerings to include a suite of analytics and index products to meet the demands of evolving markets.”
The Burton-Taylor report, Information Services Strategies of U.S. Exchange Holding Companies 2020 analyzes the Information Services Business Segments of the four largest U.S. Exchanges: Cboe Global Markets, CME Group, ICE and Nasdaq. The report includes an analysis of the Index, Investment Analytics & Desktop, and Market Data and Feeds segment for each exchange and provides company profiles for each exchange, examines growth strategies, and detailed segmentation of revenues by asset and product type.
A detailed information kit for the report can be downloaded here or the report can be purchased by visiting https://burton-taylor.com/exchangeinfoservices2020.