Market data management is software that tracks which people in a firm use which financial data terminals and data feeds, and what each one costs. It is also called market data spend management. Banks, fund companies and brokers use it, because market data is one of their largest costs after salaries.
Why is it needed? A large bank may pay for thousands of terminal licences and hundreds of data feeds, from many companies. Each contract has its own price and its own rules. Some stock exchanges charge a fee for every person who sees their live prices. Meanwhile, people join, change teams and leave. Without a central record, the firm keeps paying for licences that nobody uses.
The software keeps that central record. It lists every licence, the person who holds it, its cost and the date on which its contract renews. It also reads each terminal's usage logs, which show how often each person uses it. When an invoice arrives from a data company, the software checks the invoice against the record. Then it sends the approved invoice to the firm's procure-to-pay software for payment.
Imagine a fund company in Mumbai with 60 terminal licences. Say each licence costs ₹20 lakh a year. The software finds that 6 licences have not been used for three months, because the people who hold them have moved to other teams. The firm cancels these 6 licences before their contracts renew, and saves ₹1.2 crore a year.
Firms must also report their usage to the data companies and exchanges, and they can be fined if they report too little. So the same record helps a firm stay within its contracts. Checking what the firm thinks it bought against what it is billed is a kind of reconciliation. Firms track their other technology contracts, such as software subscriptions and phone bills, in technology expense management software.