The Silo Effect
Most people agree that sharing is a good thing. Part of this means spreading your data through an organization, whether that's through a system like an investment book of record (IBOR), a data-management platform or shared feeds with common APIs. For technology, it means not developing in isolation, doubling up on the same work, and creating cross-platform inefficiencies through myopic, proprietary engineering strands.
I've spoken to many, many people about this process of breaking down silos over the past few years, for any topic that you can think of. But while everyone seems to say, yes, break down the silos, there may be a case for them in some instances.
The typical one here is the mergers and acquisitions business, which by its very nature, is heavily segmented. This is not only for resource reasons, of course, but operational and risk ones too ─ firewalls have to be in place to prevent insider trading as a start. But depending on the scale of the operation, keeping siloes in place can be beneficial too. One representative from a vendor I spoke to last week, who previously worked in compliance at major banks and small interdealer brokers, said his job was helped in some ways by the stratification of internal structure. It made it easier for his specific remit, he said, that everything was already pigeon holed neatly, and that personnel from one division didn't have access to systems or data from others ─ in essence, it provided a bottleneck.
The Plan
Assuming that a segmented approach is the way forward, though, is ridiculous. Nobody wants to return to the days where teams would double up on data feeds (and fees) to develop platforms that were broadly similar in approach, or tools that did essentially the same thing but had twice the impact on a budget sheet.
But from a risk perspective, without sufficient planning, breaking down silos also carries a danger to the business. As with most things, they key is asking what you really want to achieve from revamping infrastructure before you start doing it because enterprise is king. For example, are you attempting to save costs, are you trying to aggregate your data across various departments that could use a common feed, are you trying to create a holistic view of positions and trade information so as to better manage your exposure, or are you laying the foundations for complex counterparty risk systems that will require vast resources to run Monte Carlo simulations all day? Those are reasons why, and they have future scope in mind.
Technologists are faced with the impossible Cassandratic equation of servicing while savanting. Breaking down operational and technological siloes, while attractive, needs to be done with a clear goal in mind, lest it create more complexity and development corridors itself.
Most banks I speak to, particularly in the UK, talk about technology in the future tense. Of course they're developing now, but the budget doesn't just cover now, it has to cover years ahead, and factor in the idea that there may not be cash five years hence to undergo radical change. Technologists are faced with the impossible Cassandratic equation of servicing while savanting. Breaking down operational and technological siloes, while attractive, needs to be done with a clear goal in mind, lest it create more complexity and development corridors itself.
This week's side note: How about that Orange Business Services ─ Trading Solutions acquisition announcement, eh?
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