I know London cabbies are incredibly knowledgeable about many things, especially the streets of London (Indeed, to drive a taxi in London, you must first pass an exam known as “The Knowledge”), but it’s unusual to hail one who happens to know about market data.
“Yes, guv’nor, where you ’eaded? I’m not goin’ sarf of the river this early in the mornin’. Oh, Victoria Park Plaza? No problem. You must be goin’ to that European Financial Information Summit, right? I ’ear they’ve got a good event this year. Lot of discussions about data governance. I coulda’ gone into governance, you know. Nothing to it. But I got this ’ernia, see, so I ’ave to sit down all the time or me innards’ll pop out. ’Ere, ’ang on,” he driver said, peering at me in the mirror, then at his copy of Inside Market Data. “Aren’t you the guv’nor?”
I thought about it, and realized that while the ideas of managing something and governing something may initially sound the same, there’s a logistical and practical chasm between them. A government governs, which means setting and enforcing policy; while various arms of local government or agencies manage—by which I mean they manage the implementation of what the government dictates. So the concept of data governance first needs to come from the top—i.e. C-level executives and a company’s board—before its implementation can be managed by those in the trenches.
Perhaps more than ever at this year’s European Financial Information Summit, data quality and governance was high on the agenda, not just in the reference data stream, but also among market data executives tasked with reducing costs and eliminating duplication within datasets.
In the past, these tasks fell to market and reference data managers, though more recently firms have appointed chief data officers with overall responsibility for data throughout their organizations. However, these CDOs look at the position a different way: Being responsible for all data, they say, doesn’t mean they’re the only one who needs to worry about—or take responsibility for—data quality. Indeed, many see their role as an evangelist of processes and best practices to the rest of their firms, including their boards of directors.
If there was one clear message repeated again and again throughout the event, it was that appointing a CDO does not solve the problem, but merely represents the fact that a firm recognizes it has a problem and is taking the first step towards a solution. One person alone cannot solve a firm’s data quality issues; rather, the responsibility must lie with each and every employee who touches the data—creating a “data culture” and effectively making everyone a data scientist of sorts, said Capgemini’s Zhiwei Jiang—while the ultimate responsibility must be shouldered by a company’s board, who should be prepared to be actively involved in (and concerned about) the accuracy of data that drives decisions they sign off on.
Here’s the thing: without good data governance processes, it’s harder to control your datasets and understand the quality of your data. If you can’t verify your data’s accuracy, you should assume it is questionable. And if your data is questionable, then so is everything ranging from trades and portfolio valuations to the P&L figures by which management sets strategy—not to mention other important activities, such as client reporting and relationship management. Then, of course, there’s the data required to comply with new regulations and reporting mandates, which especially needs to be accurate. “Let’s not underestimate the challenge of complying—but it’s difficult because of where we’re coming from, not because of what it is,” said Chris Bannocks, chief data management officer at ING Bank.
With all this at stake, the question is not whether you can afford to make the investment in data governance projects, no matter how arduous and expensive, but whether you can afford not to.
Bryan Harkins joins to discuss how the CBOE-Bats integration is going and plans for the exchange operator going forward. Anthony and James talk about the SEC hack and Esma's potential new powers.Subscribe to Weekly Wrap emails