AI Disruption of the Financial Services Data Industry (Portage)

Summary

• The data management industry generates $110.5 billion in annual revenue while data integration generates $15.2 billion.p.2
• One major bank was quoted $100,000 to add two columns to a spreadsheet file.p.2
• In 2024, global spending on financial market data and news reached a record US$44.3 billion.p.5
• CUSIP, the code system for financial securities, was bought in 2024 by FactSet from S&P Global.p.4
• Portage estimates that about three-quarters of data ingestion, normalization and drafting can be automated.p.4
• Portage sees three broad investable themes in financial data, including standard-setting niches and AI-ready data infrastructure.p.11

Key insights

1. AI could make financial data radically easier to access and use and shift data quality from reactive to proactive.p.3
2. A small number of scaled platforms such as Bloomberg, LSEG/Refinitiv, S&P Global, ICE, FactSet and Morningstar control the financial data space.p.5
3. Switching costs are significant, which skews the market in favor of incumbents.p.7
4. Portage views the financial data value chain as three layers: data sourcing, data processing and analytics, and data distribution.p.8
5. Financial data 'dead zones' with no analytics or mapping standard include fixed income, AI model weighting, unstructured data, crypto and private markets.p.11
6. Agents are viewed in financial services as enhancements rather than substitutes, and keeping humans in the loop quickens procurement.p.12