Data Quality Tops Bond Market Concerns in 2025

Bond markets face a silent crisis—garbage data threatens trillion-dollar trades.

The Dirty Secret Wall Street Won't Admit

Traders grapple with inconsistent pricing feeds while legacy systems struggle to verify collateral quality. Mismatched settlement data causes daily reconciliation nightmares across major exchanges.

Why This Breaks Modern Finance

Automated trading algorithms amplify errors at lightning speed. One flawed data point can trigger cascading margin calls—yet compliance teams still manually cross-check spreadsheets.

The Cynical Truth

Banks spend millions on AI but won't fix their data pipelines—because clean data would expose how much profit comes from opacity rather than actual skill. The bond market's real product isn't debt—it's uncertainty priced at premium margins.

A new survey by SIX has revealed that poor data quality remains the biggest hurdle for fixed-income market participants to overcome, with more than half of respondents (56%) citing it as their top issue. Other key pain points included difficulties with data integration (47%) and a lack of transparency (34%).

Data quality issues across bond markets can range from mismatches in reference data such as bond identifiers or coupon details delaying settlements, to discrepancies in evaluated pricing for illiquid bonds undermining portfolio valuations.

Despite these challenges, the industry is making progress towards greater automation. Over half of firms (56%) reported that their fixed-income data management processes are partially automated and seeking further improvement, while nearly a third (31%) said they have already achieved mature and largely automated workflows.

When asked about priorities for selecting data providers, firms ranked breadth and depth of coverage, alongside data transparency and auditability, as the most critical factors. APIs emerged as the preferred method of data delivery, chosen by 53% of respondents.

Commenting on the findings, Swati Bhatia, head of fixed income, financial information at SIX, said: “Market participants are facing mounting pressure as soaring data volumes and the demand for faster decision-making fundamentally reshape the fixed-income market.

The findings show that poor data quality remains a persistent problem.

This can complicate portfolio analysis as inaccurate data often leads to misalignment with bespoke categorisation across sectors, regions and credit tiers. To overcome this longstanding issue, a much greater emphasis needs to be placed on reliable, transparent, and easy to integrate data to navigate increasingly complex bond markets. Key to this is a laser like focus on automation of data extraction and data management, alongside human data experts to provide customers with efficient and high quality data.”

Source: SIX