Some fundamental understanding of the asset class and market microstructures is needed (if not on the tech side then the quant side, but ideally both) so you know what you're trading. Given the sheer volume that goes through your typical broker-dealer, that's quite a reasonable investment to make.
I try to explain to retail investors and outsiders interested in markets that this whole operation requires a truly mind-boggling amounts of money and brainpower to keep going on a regular basis, but it's hard talking to people who have never experienced working in the industry.
MMs aren't doing deep analysis like a hedge fund, but they do have insight into the buy/sell interest across the market.
And how do you think one makes a market if they don't have an idea what something is worth? Prices aren't necessarily values, MMs value instruments and then trade accordingly at prices quoted. They don't search for misvalued items like a l/s fund, but they always have a theoretical value and make a market around that internal number when asked.