A Rimes Roundtable moderated by Waters this week highlighted the reasons buy sides should consider outsourcing data management as part of broader institutional transformation around the problem. The rub? Keeping everyone in line.
You don't need BST's editor to tell you that yesterday, the first confirmed case of Ebola was discovered in New York City. Cue news organizations freaking out and half-serious office banter debating what was really pretty inevitable, as well as renewed, actually-serious political chatter about whether flights to the handful of affected countries in West Africa should be banned.
The doctor who contracted the virus—who was working with Médecins Sans Frontières in Guinea—exactly highlights the problem with a flight ban. For one thing, it's no panacea, and could make it more difficult for those in a position to help (who are in tremendous shortage locally) to get to those in need.
The other argument against is that borders are naturally porous, and "officially" sealing several countries off from the world would, if counterintuitively, actually make it more difficult to monitor and contain the spread of the disease.
The idea is endemic of the broader problem with drawing thick lines to tackle a problem, especially when you never wanted to do so in the first place—and it's something many in financial technology should be annoyingly familiar with.
At the refreshingly candid Rimes discussion this week, the point popped up again and again: when trying to improve data governance processes, you can take all the measures in the world to guide the way data is taken in and manipulated by the variety of research analysts and risk managers across a global firm.
Data, like people, is incredibly difficult to corral. Call it the technologist's lament. And, oh yeah, it's still very costly to get these projects done at all, because the nature of the problem means it takes years to deal with.
But ultimately, it still somehow "spills over" into hundreds if not thousands of loosely-controlled spreadsheets around the company—puddles of information splattered about where there should be an exquisite, perfectly-planned aqueduct.
Once upon a time, getting C-level support for the expensive and intrusive choice to overhaul data management was difficult, though it was agreed at the roundtable that the regulatory boom has made the business case much easier. This, firms and vendors alike are finding, is only half the battle though.
Such a transformation always creates knock-on effects, because it ultimately requires personnel to modify their behavior for it to work, whether you're building out the solution in-house or, more likely, working in concert with a managed service like Rimes. Data, like people, is incredibly difficult to corral. Call it the technologist's lament. And, oh yeah, it's still very costly to get these projects done at all, because the nature of the problem demands multiple years of attention.
We've heard about this same issue on both the reconciliations and portfolio accounting sides for a while now, the latter of which reinvigorated the investment book of record (IBOR) concept. Single versions of the truth are surely in vogue.
But the takeaway from the roundtable on Thursday was that spreadsheet troubles have seeped far deeper into firms' operations. Just getting a handle on index benchmarks is tough in its own right, the participants said, and one executive pegged that as only about "10%" of the overall problem. Ouch.
As another put it, the more ambitious you try to be, the greater the expectations become, the more workarounds people create, and all of the sudden, you find yourself drawing lines just to temporarily hold everything together.
It's one of the truly enduring challenges for the buy side, one I'm sure we'll continue to cover at length.
In the meantime, let's all stop threatening to boycott the subway, and turn our attention to something that we can far more easily eradicate: tacky Halloweeen costumes.
Waters Wavelength Podcast Episode 97: C-Level Execs Talk Bitcoin, Fintechs, Cognitive Computing & Open-Source Tech
In separate interviews, executives from AQR, JPMorgan, Cboe and IBM discuss topics permeating the capital markets.Subscribe to Weekly Wrap emails
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