The Data Right

Political issues are increasingly important for
private companies, and people want shared services-
as long as someone else is footing the bill. For
some, these are the day-to-day features of doing
business in economies based on socialist principles.
For others, it describes what the reference data
industry is increasingly faced with.
The utility, something the dictionary would
describe as a public service like water, is now
becoming a well-known concept in the reference
data market. Market participants are talking about
a need to share and collaborate, and firms are
dedicating more and more resources to sending
comment letters to regulators and following politics.
Some have even found themselves clocking
up air miles en route to Washington, DC. In fact, if
all my connections had been using TripIt to share
their whereabouts, I'm certain the last couple of
months would have shown a spike in people going
to the capital.
The reason is that there are a large number of
organizations interested in playing a role in the
legal entity identification process, currently being
debated by US regulators. Some want to be the
registration authority for an identifier, and some
want to take responsibility for the operational
aspects. It is the operational part of this discussion
that is linked to the concept of a utility. The
pro-utility camp sees this being the start of an
industry-wide reference data utility-and this is
the camp that seems to make the most noise.
But this month, I've spoken to a large number
of people about how the utility model could work
in the reference data market, and one group of
market participants is not convinced data will be
managed in an industry-wide utility in the future.
This group of people may not go to conferences
and do a presentation on why utilities do not
excite them, and they may not be talking to peers
about this topic. They simply see the industry as
having other things to worry about. Some would
ask me about who was mentioning this word
‘utility,' and others would seem less interested,
citing hurdles related to governance and ownership.
For this camp, the overriding theme is that
capitalism still reins.
It may seem like the industry has adopted
socialist principles in recent times, but it is important
to remember that it is not all about sharing.
There are still companies out there that have to
meet shareholder expectations and constantly
thrive to improve services and offerings to
generate higher profit margins. Although some say
reference data is like water, there is a significant
difference-clean water is a human right, and
clean reference data is not.