AI Adoption to Drive 50% Surge in Market Data Costs for Financial Institutions by 2027

Substantive Research, BCG Expand, and TRG Screen have formed a partnership to analyze the disruptive impact of artificial intelligence on the procurement and pricing of financial market data. For fintech professionals, this collaboration highlights a critical shift where AI-driven data consumption is outpacing budgets, leading to opaque negotiations and potential technical lock-in with major vendors.

What was announced

The partnership combines the expertise of Substantive Research, BCG Expand, and TRG Screen to evaluate how AI is transforming data markets and the operational relationships between financial institutions and their providers. The study identifies a surge in demand for Model Context Protocols (MCPs)—open standards that permit agentic AI models to interact with external data—and direct data feeds into Large Language Models (LLMs). These technological shifts are forcing a variety of responses from index, ratings, terminal, and ESG data providers.

A primary finding of the collaboration is the significant disconnect in pricing expectations. Initial supply discussions for AI-integrated data have seen some vendors propose costs up to 300% higher than existing agreements. While these are often negotiated down to an average increase of 50%, it underscores the lack of a standardized pricing model in the current market. Because agreements are negotiated bilaterally and opaquely, financial institutions struggle to benchmark the effectiveness of their negotiations.

The research also highlights that while data volumes continue to grow, AI allows firms to interpret and consume this information at much higher speeds and in greater detail. However, the commercial structures being introduced by vendors, such as proprietary MCP servers and specific AI access models, are creating risks of technical lock-in. This limits the flexibility of buy-side and sell-side firms to apply their own AI tools to underlying data, as vendor-defined models often dictate the terms of use and licensing.

"Some supply discussions we are seeing amongst clients are starting from very high bases, some of up to 300% higher costs from certain vendors, before they are negotiated down to an average of 50%. This highlights how nascent these discussions are and how far apart both sides are before reaching a deal. Data budgets often run into seven figures for larger firms, so we are talking about significant extra costs from the inclusion of AI in the data market, and this is setting the tone for how these agreements will be reached in future."

Mike Carrodus, CEO of Substantive Research.

The companies involved

Substantive Research is a provider of research and market data discovery and pricing analytics. Led by Founder and CEO Mike Carrodus, the firm focuses on bringing transparency to the opaque costs associated with investment research and market data. BCG Expand, where Jens Munthe serves as Senior Principal, is a specialist subsidiary of the Boston Consulting Group that provides industry-leading benchmarks and market data infrastructure analytics to the global financial services sector.

TRG Screen is a prominent player in the market data management space, offering software and services to help firms manage their data subscriptions and spend. Trip Wadleigh serves as the Global Head of Strategic Relationships at the firm. TRG Screen has recently been active in the consolidation of the market data advisory sector; in July 2026, the company acquired BST America to bolster its managed services and advisory capabilities. Together, these three entities represent a significant cross-section of the market data ecosystem, from discovery and pricing to infrastructure and long-term management.

What FF News has reported before

FF News has closely tracked the friction between AI adoption and financial constraints within the research sector. In October 2026, we reported that Buy Side Research Spend Stagnates Despite 40% Surge in AI Tooling Adoption, a trend that aligns with the current findings of data costs outstripping budget growth. Earlier that year, coverage highlighted how Broker Licensing Restrictions Stalling AI Adoption for 69% of Major Asset Managers, illustrating the regulatory and contractual hurdles firms face. Additionally, the expansion of the market data advisory landscape was noted when TRG Screen Acquires BST America to Bolster Market Data Advisory and Managed Services, a move that positioned the firm to better handle the complexities of AI-driven contract negotiations described in this latest announcement.

What this means

The market data industry is entering a period of extreme friction as the power dynamic shifts toward vendors who control the "fuel" for AI models. The revelation that initial price asks are reaching 300% suggests that vendors are testing the upper limits of what the market will bear before standardized pricing emerges. For the buy-side, the danger is no longer just the cost, but the loss of sovereignty over their own data strategies due to vendor-imposed technical lock-in. This announcement moves the needle by exposing the opacity of these negotiations; without a central pricing model, the sector risks a two-tier system where only the largest firms can afford the data necessary to remain competitive in an AI-first environment.