Impact of High-Quality Market Data
on Modern Investment Strategy – Part 1

Author:

Grace Osemerin
MD Valuations Senior Pricing Representative

High-quality market data is foundational to sound investment decision-making in modern finance. Fund administrators, asset managers, wealth managers, and banks rely on data to value assets, assess risks, and identify opportunities. When this data is accurate, timely, and comprehensive, it empowers confident strategies and effective use of AI models. Poor data can lead to flawed decisions, introducing errors, biases, and blind spots—contributing to an estimated $3.1 trillion in annual losses to the U.S. economy, according to industry estimates. In today’s competitive and tech-driven markets, organizations cannot afford to ignore the quality of their data.

The High Cost of Poor Data Quality

Decision-makers often feel the pain of bad data, from scrambling to reconcile conflicting reports to making choices based on outdated information. The aggregate costs are startling. Gartner found that the average cost of poor data quality on businesses is $12.9 million annually. Employees spend enormous time dealing with “data dilemmas” instead of value-generating work. Studies suggest that workers may spend up to 50% of their time locating and validating data, and as much as 80% on data preparation and cleaning—leaving limited time for analysis. Many institutions still struggle with data granularity challenges and limited ability to respond rapidly to market events due to poor data infrastructure and low data trust.

The impacts go beyond dollars and hours. Inaccurate or incomplete data undermines strategic initiatives and day-to-day operations alike. Financial firms face analogous risks: poor market data can lead to incorrect portfolio valuations, compliance breaches, damaged client relationships, and misguided investment moves. Decision quality is closely tied to the quality of the underlying data.

The Growing Role of Market Data in Investment Policy

Financial markets are now an intricate ecosystem propelled by a wide range of drivers—economic indicators, geopolitical events, regulatory shifts, and even mood. Mastering complexity requires not just access to data, but clean, contextual, and trusted data that can be transformed into actionable insight.

High-stakes investment decisions based on flawed data can produce flawed conclusions and costly mistakes. A portfolio manager working with erroneous pricing data might unwittingly buy an overvalued asset, or a risk officer fed inconsistent exposure data might underestimate a fund’s actual risk. Even the most seasoned professionals can be led astray by a distorted picture of reality.

High-quality market data is timely, precise, comprehensive, consistent, and actionable.

Modern portfolio theory is being revolutionized by integrating real-time factor models, ESG data, and macroeconomic indicators.

Quality data allows portfolio managers to:

• Adjust portfolios dynamically in response to evolving market conditions.
• Integrate alternative sources of data (e.g., ESG scores or geopolitical risk) into asset allocation.
• Better align investments with clients' goals and market realities.

One of the most important advancements is the way quality market data is now more widely available outside of huge hedge funds and asset managers. Retail platforms and robo-advisors increasingly integrate institutional-grade data analytics, allowing individual investors to:

• Analyze funds and portfolios against each other based on style factor analysis.
• Make fact-based decisions based on visualization tools and scorecards.
• Be able to get detailed disclosures and performance benchmarks that were previously only for professionals.

This broader access to information is helping narrow the knowledge gap between retail and institutional investor.

Transforming Investment Decision-Making

Quantitative and algorithmic methods rely significantly on clean, structured data for model training and back testing, supporting predictive analytics and machine learning solutions' precision, enabling firms to:

• Make market movement predictions with higher confidence.
• Identify arbitrage or trend-following opportunities.
• Automate trade decisions based on real-time signals.

The right datasets can uncover subtle patterns, such as detecting market signals from alternative data or identifying anomalies in financial statements. The benefits extend beyond sharper analytics to organizational agility. When everyone, from the trading desk to the risk committee, operates from the same high-quality data foundation, decisions are faster, more aligned, and more informed. That agility can mean the difference between seizing an opportunity and missing it in fast-moving markets.

Whether it’s an algorithmic trading system or a client segmentation model for wealth management, unclean or biased data will almost always lead to flawed decision-making.

Confluence Technologies, Inc. is a trusted source for clean, high-quality data

Confluence is a global leader in data technology and services, offering quality aggregated data and sophisticated pricing solutions for a range of assets, including those that are complex or less liquid. Our extensive suite of solutions is designed to assist asset managers, asset owners, and investment service providers worldwide in making more informed decisions, helping manage risk, and more easily satisfying regulatory requirements.

We transform data challenges into actionable insights.

Disclaimer

The content provided by Confluence Technologies, Inc. is for general informational purposes only and does not constitute legal, regulatory, financial, investment, or other professional advice. It should not be relied upon as a substitute for specific advice tailored to particular circumstances. Recipients should seek guidance from appropriately qualified professionals before making any decisions based on this content.  

Unless otherwise stated, Confluence Technologies, Inc. (or the relevant group entity) owns the copyright and all related intellectual property rights in this material, including but not limited to database rights, trademarks, registered trademarks, service marks, and logos.  

No part of this content may be adapted, modified, reproduced, republished, uploaded, posted, broadcast, or transmitted to third parties for commercial purposes without prior written consent.

About Confluence

Confluence is a global leader in enterprise data and software solutions for regulatory, analytics, and investor communications. Our best-of-breed solutions make it easy and fast to create, share, and operationalize mission-critical reporting and actionable insights essential to the investment management industry. Trusted for over 30 years by the largest asset service providers, asset managers, asset owners, and investment consultants worldwide, our global team of regulatory and analytics experts delivers forward-looking innovations and market-leading solutions, adding efficiency, speed, and accuracy to everything we do. Headquartered in Pittsburgh, PA, with 700+ employees across North America, the United Kingdom, Europe, South Africa, and Australia, Confluence services over 1,000 clients in more than 40 countries.

For more information, visit confluence.com