Path To Alignment

Following on the last column, which raised the question of whether large funds can pursue innovations in data management in the same way hedge funds are, this past week, EDM Council managing director Mike Atkin, speaking in a webcast hosted by Tech Mahindra, cautioned that the industry is indeed far behind on improving data infrastructure.

Aligning data properly with its true meaning is the approach firms ought to take to best address data management and get the flexibility that otherwise might not be possible due to long-term investments in legacy systems, as Atkin counsels.

Identification of instruments, entities and deal terms has progressed, to better support analytics—but inconsistencies in those identifications and the need to do reconciliations still abound, says Atkin. The issue isn't so much bad data as it is the need to harmonize data, he adds.

"We have lots of proprietary interfaces and disparate data all over the place, and lots of repositories," says Atkin. "The first goal is to simplify—unraveling lineage, understanding critical data elements. We're all in the midst of doing this. Much of the industry is now putting all its energy into unraveling the complexity of processes."

Only when harmonization and consistency is achieved can firms take the bigger step of aligning data to meaning, which is the bigger aspiration that Atkin puts forward. He cites glossaries, ontologies [the EDM Council, with the Object Management Group, has developed its own ontology, FIBO], transformation processes, and also the identifiers themselves, as the pieces necessary to align data and meaning.

Combining all of those into metadata and applying it to data quality objectives is difficult, Atkin acknowledges, but doing so—effectively creating a set of business rules for the data to inspire trust and confidence in data consumers.

If this is completed, the resulting data management infrastructure could have the flexibility and effectiveness that its hedge fund counterpart already boasts.