Why is Data Quality Still Such a Problem?

More than three years after Lehman's collapse, it still takes some firms days—or even weeks—to aggregate their data. Anthony says that is galling.

If you want to get your data right, you're going to have to throw a significant amount of time and resources at it.

I have profiled many CIOs and CTOs in the pages of Waters, and many of them have told me that data quality is the first thing they addressed when they started in their jobs. This wasn’t always an easy sell, but after Lehman Brothers collapsed and the economy followed shortly thereafter, many CEOs and CFOs were more willing to loosen the purse strings for data quality projects.

That's why I was so taken aback upon reading a recent survey.

According to New York-based investment management solutions vendor SimCorp, which polled nearly 100 buy-side firms, many are still struggling to improve their data systems. The survey found that 40 percent did not have confidence that the data they receive from disparate systems is "consistent and of high quality.”

What’s worse, about 30 percent of respondents said it would take days, if not weeks, for them to "generate a report calculating [their] organization's exposure/performance across all holdings, including derivatives.” Unbelievable.

The upside of this is that two-thirds of respondents said there was a "significant effort" under way to "reconcile data between disparate systems/sources.” But this is tempered somewhat by the fact that one-third called efforts at their firms “minimal.” At least the glass is two-thirds full.

I reached out to David Kubersky, managing director of SimCorp North America, to find out what he thought of the survey's findings.

"Let's roll back the tape a couple of years to the weekend Lehman collapsed: This survey shows that 30 percent of those firms we spoke with would not be able to figure out over the weekend what their counterparty risk was," Kubersky says.

"The issue at hand is that a lot of companies in this space have a lot of disparate systems supporting the same central investment process," he says. "So they might've started with just an equities systems, and then added fixed income, and then needed something special for derivatives, or maybe there were acquisitions—that's why it takes days or weeks to get at their information. Fundamentally, a data management strategy is not currently in place at a lot of organizations—or at least it's not delivering effective results."

It might not seem like it, but Lehman imploded more than three years ago, which is a very long time in the technology space. Believe me when I say that I understand that creating sufficient data management processes and projects takes time and is an ongoing battle, but I still find it ridiculous that it takes some firms days and others weeks to pull together their information.

I don't care if your firm is running a tight ship when it comes to data quality. The answer to the question about whether there is an effort to reconcile data between disparate systems/sources should have been a resounding “Yes.”

The scary thing about 33 percent of respondents answering now is this: Firms that are truly able to efficiently reconcile their data probably answered "Yes" to that question; it's either the laggards or arrogant or delusional ones that likely answered "No.”

A Fond Farewell to Rob Daly
As many of you may have already heard, Rob Daly, the US Editor of Waters and Online Editor for WatersTechnology.com, is leaving the company.

Victor Anderson already summed up what most of us who have worked with Rob feel about the man, but I'd just like to pass along a quick thank you. I didn't really know anything about financial IT when I joined this company and I leaned on Rob heavily for advice and to tap into his vast wealth of knowledge.

I've always found Rob to be helpful and welcoming. I want to wish him the best of success on his new endeavors. Cheers, Rob.