Opening Cross: Utilities Will Get Data Management Out of the Closet… And to the Dry Cleaners
Why duplicate efforts that don't add value?
In fact, it was at APFIC a few years ago that a panel of data professionals clearly enunciated why they so often get stuck with tasks relating to new regulations and compliance requirements, rather than their colleagues in risk management or compliance. The reason, they said, is that regulatory issues are generally data issues, and functions such as reporting and proving compliance are straight-up data issues, where a firm must delve into its databases, capture the correct data points and present them in a usable way. To do this for the plethora of complex regulations out there, firms can’t rely on manual processes—that’s simply too repetitive and time-consuming. What they need is better data governance strategies to ensure data is not just stored, but also properly managed, indexed, cross-referenced, etc., to make it usable. It’s one thing to meet a requirement that data must be stored indefinitely, but quite another that the data should be usable and that you should be able to present specific data points within a set time.
This kind of governance structure isn’t just a requirement for regulatory compliance, though that may have driven most of the spend in these areas over the past few years; it’s also a necessity to be able to leverage Big Data and the kinds of analytics now becoming more commonplace in different areas of the financial markets (see Charles Fiori’s Open Platform elsewhere in this issue). Think of all your data as an enormous collection of clothes in a tiny closet: without a good structure for organizing them, how can you expect to find an item, let alone find the matching sets, or to create a properly coordinated outfit?
However, there are many aspects of data management that don’t add any competitive advantage, such as basic instrument data management, and cleansing and scrubbing. Think of these as your dry cleaning: it’s inefficient for most people to have a massive dry cleaning machine at home, so we have someone else do it. And the data world is now becoming more open to sending out its cleaning—quite literally—with the emergence of the new Securities Product Reference Data initiative, spearheaded by SmartStream Technologies, Goldman Sachs, JP Morgan and Morgan Stanley.
For a detailed discussion of SPReD and other utility-related issues, check out the special report on the topic that will be distributed with the November edition of Inside Reference Data. The argument for a utility approach is that a single entity can perform the same role that is currently duplicated across each and every financial firm—all of whom have to ensure clean and accurate instrument data and have to prepare data for regulators—but can leverage economies of scale and eliminate those duplicative efforts and costs. These tasks are non-competitive, and add no revenue stream, so why keep them in-house? The challenge to a utility achieving its aims will be how open data providers are to implementing flexible commercial models to reflect a utility rather than many individual consumers. But either way, firms should still save on the cost of resources.
So in future, regional offices with smaller budgets and staff should be able to take advantage of utilities to focus on other initiatives—either making money from new product development, or saving money through cost management—that do make a difference to their bottom line.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Data Management
Chris Edmonds takes the reins at ICE Fixed Income and Data Services
Edmonds is now leading ICE’s fixed income and data business as the rush to provide better data and analytics in fixed income builds.
Deutsche Börse democratizes data with Marketplace offering
Deutsche Börse Group is set to unveil its Marketplace, a one-stop data shop designed to simplify and streamline data acquisition and consumption for its clients, while also surfacing data from across the firm to its own users. Jan Stiebing and Sven…
DSB says industry is ready to meet UPI mandate ahead of deadline
The Unique Product Identifier will be required for certain OTC derivatives in the EU at the end of April, following US adoption in January.
Mapping a successful data journey: strategy, execution and sustainability
A well-planned data journey can positively impact an organization’s long-term trajectory. However, it is important to have clarity not only in the strategy but also in successful execution and sustainability for the long haul, argues data veteran Subbiah Subramanian.
The IMD Wrap: The growing data catalogue space
With their potential to manage costs and surface strategic datasets, it’s no wonder Max gets excited about data catalogs. This week, he takes a look at a new startup entering the space.
LSEG to sunset Redi EMS in favor of Tora
Sources say competitors will look to seize on the decision to win over Redi’s sizeable US client base.
The IMD Wrap: Taking stock of inventory management
With market data and associated costs typically representing a firm’s third-largest expense, there’s a lot of incentive to manage data and its usage more efficiently. Max flings open his fridge to illustrate what’s new in this space.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- Deutsche Börse democratizes data with Marketplace offering
- Sell-Side Technology Awards 2024: All the winners