From data to decisions: How technology is revolutionising securities finance
10 June 2025
The ability to access, analyse, and act upon data in real time is essential for market participants seeking to maintain a competitive edge, says Matthew Chessum, director of securities finance at S&P Global Market Intelligence
Image: stock.adobe.com/FANTASY WORLD
In today’s fast-paced financial landscape, technology plays a critical role in ensuring that markets function efficiently and effectively. The securities finance market — which encompasses activities such as securities lending and repurchase agreements — is no exception. As market participants increasingly rely on data-driven insights to make informed decisions, the integration of advanced technologies has opened new opportunities for optimising operations, managing risk, and enhancing liquidity.
Over the last few years, technological advancements have reshaped the securities finance market through the introduction of intraday data, enhanced data delivery capabilities, and innovative client onboarding and risk management solutions.
Driving technological advancements
Data is the lifeblood of modern financial markets. The ability to access, analyse, and act upon data in real time is essential for market participants seeking to maintain a competitive edge. In the securities finance market, the shift from traditional end-of-day data to intraday data has been a game-changer. Intraday data refers to the continuous flow of multiple data points throughout the trading day, providing a more accurate and timely reflection of market conditions. This granular level of data enables participants to base their decisions on the most current information available, ultimately enhancing their trading strategies and risk management capabilities.
Enhancing returns and risk management
One of the primary benefits of intraday data is its impact on risk management. By providing near real-time information, market participants can assess the value of collateral and the securities they are lending or borrowing more effectively. This capability is especially crucial in volatile markets, where prices can fluctuate significantly within a single trading day. With intraday data, lenders and borrowers can adjust their positions swiftly in response to market movements, thereby reducing the risk of collateral shortfalls or overexposure.
A recent analysis by S&P Global Market Intelligence highlighted the substantial improvement in the generation of alpha signals through intraday data services. The study revealed that a hypothetical US equity long-short strategy, utilising both early and intraday data files, yielded an annualised return of 15.4 per cent and an information ratio of 0.99.
This indicates that the investment strategy generates a high level of excess return relative to its benchmark with relatively low volatility, showcasing strong risk-adjusted performance. Such findings underscore the value of intraday data in enhancing investment strategies and optimising returns.
The power of intraday data
In addition to improving risk management, intraday data contributes to greater transparency in the securities lending market. Frequent data points provide insights into intraday trends and patterns that may not be apparent with end-of-day datasets. This transparency results in more comprehensive datasets and improved market confidence, as participants gain a clearer understanding of supply and demand dynamics.
Moreover, the introduction of intraday data enhances liquidity in the securities lending market. By offering a more accurate reflection of current market conditions, it attracts a wider range of participants, including those hesitant to engage in securities lending due to concerns about price volatility and risk. This increased participation fosters deeper and more liquid markets, benefiting all participants.
Merging repo and securities lending operations
Technology has been instrumental in facilitating the integration of repo and securities lending market datasets, enabling firms to access comprehensive insights that enhance decision-making and operational efficiency. The integration of technology and market data from both repo and securities lending continues to revolutionise the securities finance landscape, providing substantial advantages to market participants.
Following the launch of S&P Global Market Intelligence’s Repo Data Analytics product — which now also offers a comparison between repo and securities lending data — banks, agent lenders, and investors can now analyse information more comprehensively, optimise their operational frameworks, and enhance their funding and financing strategies.
The simultaneous access to both repo and securities lending data empowers firms to make more informed decisions. By comparing rates across these two interconnected markets, participants can pinpoint the most advantageous opportunities for borrowing
and lending.
This side-by-side analysis not only enables firms to assess demand and pricing trends more effectively but also leads to enhanced lending strategies and improved liquidity management. For example, if a firm identifies a favourable lending rate in the securities lending market, it can swiftly pivot to capitalise on that opportunity, thereby optimising its overall funding strategy.
Moreover, the ability to analyse repo and securities lending data concurrently fosters greater transparency in the market. Participants can gain insights into market dynamics that were previously obscured by siloed operations, allowing for a more integrated view of both markets. This transparency not only builds confidence among market participants but also supports regulatory compliance and reporting requirements. As regulators increasingly emphasise the importance of transparency and risk management, having access to comprehensive and integrated datasets becomes essential for meeting these demands.
The introduction of standardised datasets that compare fees across different markets is a crucial step in driving cross-product efficiency. By examining individual ISINs, or aggregating data to create real and synthetic indices, firms can streamline their operations and enhance their decision-making processes. This capability allows for a more nuanced understanding of market conditions, enabling firms to respond swiftly to changes and optimise their trading strategies.
The benefits of having simultaneous access to integrated repo and securities lending data extend beyond operational efficiency. By leveraging this comprehensive data, firms can significantly improve their risk management practices. A holistic view of both markets enables participants to assess collateral quality, counterparty risk, and market volatility more effectively. This integrated approach to risk management is essential for navigating the complexities of the securities finance landscape, ensuring that firms can adapt to evolving market conditions while maintaining robust operational integrity.
Streamlining the onboarding processes
The onboarding of new funds into a securities lending programme is another area where technology is making a significant impact. Traditionally, the onboarding process has presented opportunities for improvement, which can enhance revenue generation and strengthen competitive advantages. The traditional onboarding process can involve counterparts navigating through numerous emails, spreadsheets, and documents, highlighting the potential for streamlining and enhancing efficiency.
The S&P Global Market Intelligence Onboarding Accelerator tool represents a pivotal advancement in this area. By utilising a centralised online portal for documentation storage and sharing, the tool allows market participants to digitise and formalise their onboarding workflows. Through this portal, clients can track communication flows, create bespoke policies for document inclusion, make ad-hoc requests for additional information, and download documentation directly from lenders’ document vaults. This capability creates a single repository for all relevant documentation, streamlining workflows and enhancing governance throughout the onboarding process.
The Onboarding Accelerator tool provides a standardised and transparent method for managing documentation and communication. By leveraging the data available in the Securities Finance portal, it offers insights into credit scores and inventory analytics, empowering front office teams with information to enhance their decision making. The competitive advantages gained from digitising the onboarding process are substantial, including reduced administrative costs, increased transparency, streamlined communication, and minimised risk through well-documented audit trails.
The S&P Global Market Intelligence Onboarding Accelerator tool has been instrumental in transforming the securities finance markets by leveraging technology to enhance the onboarding process significantly. By enabling firms to track documentation and access critical data insights seamlessly, this tool empowers participants to make informed decisions more rapidly, fostering a more agile and competitive environment. Consequently, Onboarding Accelerator not only drives operational efficiencies, but also catalyses the overall growth and dynamism of the securities finance markets, allowing participants to seize new opportunities with greater ease and effectiveness.
Data delivery flexibility
The securities lending market has undergone a significant transformation in data delivery due to advancements in technology. Key developments such as data portals, APIs, flat files, and cloud-based platforms like Snowflake, have been instrumental in this shift.
Data portals serve as user-friendly interfaces, allowing market participants to access real-time information, including securities lending rates and market trends. Their intuitive design enhances user experience, enabling quick navigation through extensive datasets for effective decision-making.
APIs have revolutionised data delivery by facilitating seamless integration between systems. They enable firms to connect internal systems with external data sources, allowing for real-time updates and automated workflows. This reduces manual data entry, minimises errors, and enhances response speed to market changes, enabling quicker, data-driven decisions.
While flat files remain a reliable method for receiving large datasets, they are crucial for historical data transfer, supporting trend analysis and back-testing of trading strategies. Their flexibility allows firms to customise data retrieval processes.
Snowflake, a cloud-based platform, empowers firms to store, manage, and analyse vast amounts of data efficiently. Its architecture allows for the integration of multiple data sources, providing a comprehensive view of securities lending activities. This capability supports advanced analytics and insightful reporting, enhancing overall data management.
Third-party distribution channels like Bloomberg and FactSet also contribute to data delivery flexibility by providing access to a wide range of financial data and analytics. By aggregating information from various sources, these platforms help firms gain insights into market trends and improve trading strategies.
Overall, the innovation in data delivery methods has significantly enhanced the securities lending market, enabling participants to operate more efficiently and make quicker, data-driven decisions.
Harnessing AI for opportunities
In the securities finance markets, the integration of advanced technology is transforming risk management, collateral optimisation, and revenue generation. Currently, data operations teams process millions of transactions daily, using robust data cleansing techniques to maintain accuracy. While some trades may raise flags, the recent implementation of machine learning (ML) has allowed the team to evaluate these trades with greater precision, significantly reducing manual efforts and minimising errors. This efficiency not only alleviates the workload but also enhances the quality of data delivered to clients.
Looking ahead, the availability of generative AI is providing deeper insights into market dynamics. It is also able to provide tailored commentary on holdings and positions, which enrich client relationships and drive higher revenues. Moreover, the exploration of predictive analytics is enabling data providers and market participants to anticipate seasonal demands and market trends in more detail and at greater speed, further optimising strategies and enhancing profitability in an increasingly competitive landscape.
The broader impact on financial markets
As technology continues to advance in the securities finance market, the benefits extend beyond individual firms and participants. The improvements in data delivery, risk management, market data, and onboarding processes all contribute to a more efficient and transparent market environment. This, in turn, enhances liquidity, allowing for quicker access to capital and better pricing for borrowers and lenders alike.
The ripple effects of these advancements can be felt throughout the broader financial markets and the global economy. Increased liquidity in the securities finance market supports more efficient capital allocation, enabling businesses to access the funding they need for growth and innovation. Furthermore, enhanced risk management capabilities contribute to overall market stability, reducing the likelihood of systemic risks that can impact the financial system.
Over the last few years, technological advancements have reshaped the securities finance market through the introduction of intraday data, enhanced data delivery capabilities, and innovative client onboarding and risk management solutions.
Driving technological advancements
Data is the lifeblood of modern financial markets. The ability to access, analyse, and act upon data in real time is essential for market participants seeking to maintain a competitive edge. In the securities finance market, the shift from traditional end-of-day data to intraday data has been a game-changer. Intraday data refers to the continuous flow of multiple data points throughout the trading day, providing a more accurate and timely reflection of market conditions. This granular level of data enables participants to base their decisions on the most current information available, ultimately enhancing their trading strategies and risk management capabilities.
Enhancing returns and risk management
One of the primary benefits of intraday data is its impact on risk management. By providing near real-time information, market participants can assess the value of collateral and the securities they are lending or borrowing more effectively. This capability is especially crucial in volatile markets, where prices can fluctuate significantly within a single trading day. With intraday data, lenders and borrowers can adjust their positions swiftly in response to market movements, thereby reducing the risk of collateral shortfalls or overexposure.
A recent analysis by S&P Global Market Intelligence highlighted the substantial improvement in the generation of alpha signals through intraday data services. The study revealed that a hypothetical US equity long-short strategy, utilising both early and intraday data files, yielded an annualised return of 15.4 per cent and an information ratio of 0.99.
This indicates that the investment strategy generates a high level of excess return relative to its benchmark with relatively low volatility, showcasing strong risk-adjusted performance. Such findings underscore the value of intraday data in enhancing investment strategies and optimising returns.
The power of intraday data
In addition to improving risk management, intraday data contributes to greater transparency in the securities lending market. Frequent data points provide insights into intraday trends and patterns that may not be apparent with end-of-day datasets. This transparency results in more comprehensive datasets and improved market confidence, as participants gain a clearer understanding of supply and demand dynamics.
Moreover, the introduction of intraday data enhances liquidity in the securities lending market. By offering a more accurate reflection of current market conditions, it attracts a wider range of participants, including those hesitant to engage in securities lending due to concerns about price volatility and risk. This increased participation fosters deeper and more liquid markets, benefiting all participants.
Merging repo and securities lending operations
Technology has been instrumental in facilitating the integration of repo and securities lending market datasets, enabling firms to access comprehensive insights that enhance decision-making and operational efficiency. The integration of technology and market data from both repo and securities lending continues to revolutionise the securities finance landscape, providing substantial advantages to market participants.
Following the launch of S&P Global Market Intelligence’s Repo Data Analytics product — which now also offers a comparison between repo and securities lending data — banks, agent lenders, and investors can now analyse information more comprehensively, optimise their operational frameworks, and enhance their funding and financing strategies.
The simultaneous access to both repo and securities lending data empowers firms to make more informed decisions. By comparing rates across these two interconnected markets, participants can pinpoint the most advantageous opportunities for borrowing
and lending.
This side-by-side analysis not only enables firms to assess demand and pricing trends more effectively but also leads to enhanced lending strategies and improved liquidity management. For example, if a firm identifies a favourable lending rate in the securities lending market, it can swiftly pivot to capitalise on that opportunity, thereby optimising its overall funding strategy.
Moreover, the ability to analyse repo and securities lending data concurrently fosters greater transparency in the market. Participants can gain insights into market dynamics that were previously obscured by siloed operations, allowing for a more integrated view of both markets. This transparency not only builds confidence among market participants but also supports regulatory compliance and reporting requirements. As regulators increasingly emphasise the importance of transparency and risk management, having access to comprehensive and integrated datasets becomes essential for meeting these demands.
The introduction of standardised datasets that compare fees across different markets is a crucial step in driving cross-product efficiency. By examining individual ISINs, or aggregating data to create real and synthetic indices, firms can streamline their operations and enhance their decision-making processes. This capability allows for a more nuanced understanding of market conditions, enabling firms to respond swiftly to changes and optimise their trading strategies.
The benefits of having simultaneous access to integrated repo and securities lending data extend beyond operational efficiency. By leveraging this comprehensive data, firms can significantly improve their risk management practices. A holistic view of both markets enables participants to assess collateral quality, counterparty risk, and market volatility more effectively. This integrated approach to risk management is essential for navigating the complexities of the securities finance landscape, ensuring that firms can adapt to evolving market conditions while maintaining robust operational integrity.
Streamlining the onboarding processes
The onboarding of new funds into a securities lending programme is another area where technology is making a significant impact. Traditionally, the onboarding process has presented opportunities for improvement, which can enhance revenue generation and strengthen competitive advantages. The traditional onboarding process can involve counterparts navigating through numerous emails, spreadsheets, and documents, highlighting the potential for streamlining and enhancing efficiency.
The S&P Global Market Intelligence Onboarding Accelerator tool represents a pivotal advancement in this area. By utilising a centralised online portal for documentation storage and sharing, the tool allows market participants to digitise and formalise their onboarding workflows. Through this portal, clients can track communication flows, create bespoke policies for document inclusion, make ad-hoc requests for additional information, and download documentation directly from lenders’ document vaults. This capability creates a single repository for all relevant documentation, streamlining workflows and enhancing governance throughout the onboarding process.
The Onboarding Accelerator tool provides a standardised and transparent method for managing documentation and communication. By leveraging the data available in the Securities Finance portal, it offers insights into credit scores and inventory analytics, empowering front office teams with information to enhance their decision making. The competitive advantages gained from digitising the onboarding process are substantial, including reduced administrative costs, increased transparency, streamlined communication, and minimised risk through well-documented audit trails.
The S&P Global Market Intelligence Onboarding Accelerator tool has been instrumental in transforming the securities finance markets by leveraging technology to enhance the onboarding process significantly. By enabling firms to track documentation and access critical data insights seamlessly, this tool empowers participants to make informed decisions more rapidly, fostering a more agile and competitive environment. Consequently, Onboarding Accelerator not only drives operational efficiencies, but also catalyses the overall growth and dynamism of the securities finance markets, allowing participants to seize new opportunities with greater ease and effectiveness.
Data delivery flexibility
The securities lending market has undergone a significant transformation in data delivery due to advancements in technology. Key developments such as data portals, APIs, flat files, and cloud-based platforms like Snowflake, have been instrumental in this shift.
Data portals serve as user-friendly interfaces, allowing market participants to access real-time information, including securities lending rates and market trends. Their intuitive design enhances user experience, enabling quick navigation through extensive datasets for effective decision-making.
APIs have revolutionised data delivery by facilitating seamless integration between systems. They enable firms to connect internal systems with external data sources, allowing for real-time updates and automated workflows. This reduces manual data entry, minimises errors, and enhances response speed to market changes, enabling quicker, data-driven decisions.
While flat files remain a reliable method for receiving large datasets, they are crucial for historical data transfer, supporting trend analysis and back-testing of trading strategies. Their flexibility allows firms to customise data retrieval processes.
Snowflake, a cloud-based platform, empowers firms to store, manage, and analyse vast amounts of data efficiently. Its architecture allows for the integration of multiple data sources, providing a comprehensive view of securities lending activities. This capability supports advanced analytics and insightful reporting, enhancing overall data management.
Third-party distribution channels like Bloomberg and FactSet also contribute to data delivery flexibility by providing access to a wide range of financial data and analytics. By aggregating information from various sources, these platforms help firms gain insights into market trends and improve trading strategies.
Overall, the innovation in data delivery methods has significantly enhanced the securities lending market, enabling participants to operate more efficiently and make quicker, data-driven decisions.
Harnessing AI for opportunities
In the securities finance markets, the integration of advanced technology is transforming risk management, collateral optimisation, and revenue generation. Currently, data operations teams process millions of transactions daily, using robust data cleansing techniques to maintain accuracy. While some trades may raise flags, the recent implementation of machine learning (ML) has allowed the team to evaluate these trades with greater precision, significantly reducing manual efforts and minimising errors. This efficiency not only alleviates the workload but also enhances the quality of data delivered to clients.
Looking ahead, the availability of generative AI is providing deeper insights into market dynamics. It is also able to provide tailored commentary on holdings and positions, which enrich client relationships and drive higher revenues. Moreover, the exploration of predictive analytics is enabling data providers and market participants to anticipate seasonal demands and market trends in more detail and at greater speed, further optimising strategies and enhancing profitability in an increasingly competitive landscape.
The broader impact on financial markets
As technology continues to advance in the securities finance market, the benefits extend beyond individual firms and participants. The improvements in data delivery, risk management, market data, and onboarding processes all contribute to a more efficient and transparent market environment. This, in turn, enhances liquidity, allowing for quicker access to capital and better pricing for borrowers and lenders alike.
The ripple effects of these advancements can be felt throughout the broader financial markets and the global economy. Increased liquidity in the securities finance market supports more efficient capital allocation, enabling businesses to access the funding they need for growth and innovation. Furthermore, enhanced risk management capabilities contribute to overall market stability, reducing the likelihood of systemic risks that can impact the financial system.
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