Meet Robert Benedetto, Managing Director, Market Data Company
Tell us a little about your organization and why you got into this space.
We are a boutique consulting firm serving the financial information services industry. Our consultants are industry experts on market and reference data products and investment management solutions.
At MDC, we partner with our clients to answer the growing demands of their business by providing the deep expertise that lead to increased performance. Specifically, we offer a series of diagnostic software tools that drive down costs while optimizing services. We believe that market participants within the wealth management and banking sectors are underserved when it comes to their consumption of market information. We are committed to helping teams uncover insights that improve how they manage their market and reference data relationships, through software solutions that benchmark data and define its value to each participant across the enterprise. We are a client-centric organization with the objective of channeling new ideas, providing thought leadership and optimizing market data consumption for our clients.
Who are your clients and what types of regulatory challenges are they facing?
We partner with asset and wealth management firms and wholesale financial service companies across North America to provide insights and execute projects that better position them to effectively navigate the dynamic challenges they face as consumers of market data.
SEC rule 2a-5 is an emerging regulatory challenge poised to create difficulties for our clientele that will require boards to take responsibility for fair pricing practices and oversight. Under 2a-5, boards can delegate fair valuations to the investment advisor, however the board must maintain “active oversight”, ensuring that fair valuations for securities are performed in good faith. This will also place greater scrutiny around derived data sourcing and obligates board members to take responsibility for monitoring data sourcing. In addition, market data vendors will also be required to demonstrate how their data elements were sourced, processed, and tested.
One increasingly important use case is the advent of data as an asset for financial institutions. For example, the FED’s CCAR (Comprehensive Capital Analysis and Review) stress testing program will impact how firm-level data is assessed - a meaningful ROI is required to verify efficient asset performance. The change in Dodd-Frank regulations SR15-18 and SR15-19 will coincide with the acceleration of embedding the climate agenda within stress testing. Additional stress testing strategies beyond CCAR will be considered to determine how these frameworks can further drive business insights, to generate a high ROI and define best practices for managing the increased quantity of data in this space and the use of advanced technologies for capital management. Below are some financial institutions we are working with to address their increasing data needs.
What type of emerging technology do you think will have the greatest impact on your business/industry?
Technologies relating to AI and NLP will have a profound impact on the investment industry and the demand for market data. ESG investing is motivating investment organizations to adjust their strategies to accommodate this rapidly growing trend. Environmental and socially ethical investing requires new technological methods to capture, assess, rate and benchmark diverse and unconventional datasets. Robo investing has also proven to be a disruptive innovation within the investment industry that is driving a surge in the entry of retail investors into the markets. AI also provides insights on deployment plans, adoption of timelines, assessment of values and risks, and enhancing benchmarking technologies to assess patterns across organizations and industries to ensure efficient practices are being continuously measured and reported.
Why did you join the CRTA? How do you think the CRTA will help your business / industry?
We at MDC value the CRTA as a community which promotes industry leadership and advocacy for efficient technological innovation and adoption. By joining the distinguished network of CRTA members, MDC hopes to contribute to the dialogue and promote the interests of our clients impacted by rising RegTech standards. We look forward to working with the CRTA to help Canadian organizations address their regulatory, industry and professional requirements regarding benchmarking their data and technology.