Financial firms are boosting their focus on data testing as they transform their technology in an environment of increasing message rates, volumes and evolving regulatory scrutiny around operational resilience. Deploying market data testing as a service in the cloud can enable firms to launch technology faster, with assurance that it is both robust and compliant. LSEG’s Test Data as a Service delivers the agility and confidence firms need to ensure they are meeting customer, shareholder and regulatory expectations. 

• With escalating message rates, technology innovation and growing compliance demands, robust market data testing is more essential than ever.
• Market data testing should be a part of a structured best practice approach, keeping in mind changing operational resilience rules in some jurisdictions.
• Cloud-collaborative LSEG Test Data as a Service delivers testing agility and compliance assurance to firms, enabling them to innovate faster.

Whether conducting performance testing, standard testing, quality assurance, new content testing, proof-of-concept delivery, or operational resilience testing, market data testing has always been important. And having a robust approach today is more essential than ever before. 

To begin with, the financial services industry is undergoing a data and technology revolution, and this is particularly true for how market data is being used across the front, middle and back office. Consider, for example, the role of market data in cloud-based analytics, fresh approaches to algorithmic trading, and innovative uses of AI to speed processes and decision-making.  

At the same time, market data is changing. Between 2021 and 2023, there was a 66% increase in market data volumes at LSEG, compared with 13% year-on-year growth in the prior years. LSEG expects data volumes to continue to rise, so that message rate peaks could approach 50 million messages per second across all asset classes, compared with about 15 million today. 

For financial firms, the risks associated with poor data testing or failing to test data when engaging with these new approaches – or even more traditional uses – has never been higher. Firms may suffer from operational disruption, damage their client relationships, inflict financial losses on themselves, and damage their reputation. 

In addition, firms in some jurisdictions will now find themselves in the crosshairs of the regulator. For example, the EU’s Digital Operational Resilience Act (DORA) requires EU financial entities to demonstrate their ability to prevent, adapt, respond, recover and learn from all types of information and communication technology disruptions and cyber threats. The deadline for compliance with DORA was 17 January 2025. The UK had its own operational resilience implementation deadline at the end of March 2025. Crucially, robust data testing best practices enable firms to mitigate some of the compliance risks associated with growing operational resiliency requirements by preventing incidents from happening in the first place. 

Data testing done right

So, what are market data testing best practices that should be applied to front, middle and back-office use cases in financial services firms? Preparation – for example, for performance testing – is essential so that the data testing meets operational and compliance needs and provides sufficient evidence of the activity to regulators. Firms may want to:

• Understand the operational and compliance requirements around how the data should perform in the application 
• Research the historical extremes that the required data for the application has encountered – for example, volatility – to understand what historical data is needed to see how the application performs under stress
• Consider the data volume or message rate (such as messages per second) that should be used for testing both everyday performance and stressed conditions
• Create a testing plan that includes a testing strategy, objectives, scope, resources, schedule, and deliverables, based on the application’s use case
• Select the data that is to be used to test the application
• Run the selected data through an automated testing solution into a non-production version of the application to ensure the most robust testing possible
• Analyse the results via data visualisations and reporting to understand if the application meets the pre-determined requirements in the testing plan 

There are other forms of data testing – such as standard testing, quality assurance, and new content testing – and for all of these, similar best practice steps are necessary.  Data testing can also be performed for proof-of-concepts to discover, refine or review revenue generating strategies.

Data testing in the cloud

High-quality data testing ensures that market data use cases deliver on performance expectations and meet the evolving operational and compliance requirements firms face today. LSEG’s Test Data as a Service enables firms to operationalise new market data use cases faster, delivering confidence in robustness and compliance. The service is cloud collaborative, ensuring firms can deploy it into any cloud service provider relationship.

Using Test Data as a Service is straightforward. Firms can select a day of sample data from Tick History data in the cloud, which has market data going back to 1996. This ensures that firms can select the best data to meet their testing requirements for volatility or trade volumes – for example, caused by specific geopolitical, economic, and financial market events. 

Then, the Replayer – also in the cloud – will run that data in a loop at the adjustable message rate required for testing. The Real-Time Connector will forward the replaying data to the connected financial firm application. The firm’s applications will use LSEG Real-Time APIs to join with the Real-Time Connector. Data visualisations and reports are available via a user interface. 

Firms can be onboarded to Test Data as a Service in under 24 hours, on either a 30-day or 12-month contract. This rapid setup provides the agility and flexibility needed to meet unique requirements and accelerate time-to-market for new technologies. For existing customers, Test Data as a Service also enables data trials – ideal for special projects or exploratory use cases – before committing to a full purchase.

With LSEG's Test Data as a Service, financial firms can ensure that their evolving technology use cases meet both business and operational resilience requirements. Test Data as a Service supports a faster time-to-market as well as assurance that new compliance requirements are being met – enabling firms to deliver the right outcomes for customers, shareholders and regulators.

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