Choosing Data Battles

While regulation and standards developments are always high on our radar and a big part of our coverage at Inside Reference Data, data governance and data management are equally important - and necessary to be responsive to compliance needs concerning data operations.

Three pieces in this issue examine the value of data in the industry, choices of data utilities, and data governance planning, respectively. If data governance requires "Solving The Data Management Puzzle," then data managers have to know and understand the nature of the puzzle pieces. As Rares Pateanu of Morgan Stanley told us, trying to better model or manage data at its source requires knowing how that data is flowing between systems. Data owners, when modeling and flowing data, need accuracy and quality in those processes to have meaningful dialogue about assessments based on that data, Pateanu explains.

That brings us to the growing wave of data operations outsourcing happening in the industry, as reported in "Multiples of Utility." Firms have become more comfortable with outsourcing data operations, trying to add efficiency to processing while maintaining data quality standards. The establishment of multi-firm utilities is emerging as a way to achieve that efficiency while keeping up the quality, as GoldenSource's Stephen Engdahl points out in this story. Functions performed across firms are more than just items that can be addressed by "lifting out a single institution's operations and running it under the logo of a different firm," as Engdahl describes it.

When thinking about value, those concerned with efficiency might see the data and value equation as being about keeping costs down, but others are thinking about the value that can be derived from fully engaged data management. HSBC global banking and markets CDO Tarrill Baker, who will deliver a keynote address on this topic at our European Financial Information Summit in London on September 26, sees reference data as the foundation for the whole data chain. Baker emphasizes the importance of improving data quality to supporting business priorities around data management.

The flipside of these data management trends is that more details of several ongoing regulation and standards efforts have emerged this past month. Notably, the Basel Committee on Banking Supervision filled in more gaps in its Basel III capital adequacy rules, ISITC issued standards for multi-listed identifiers and the legal entity identifier (LEI) saw several new developments.

We've already lauded the Basel Committee's action in an online opinion column ("Basel Committee Returns To Spotlight"), but the new bits of the LEI story leave one wondering. The London Stock Exchange has begun issuing its own pre-LEIs with a function allowing for bulk submissions. Swift issued a directory to coordinate Bank Identifier Codes with LEIs. Lastly, the Regulatory Oversight Committee (ROC) responsible for a global LEI standard is now beginning to consider applications for its Global LEI Foundation's board. Will those prospective board members be able to pull together the varied pre-LEIs and efforts to link the LEI with other codes? As stated in this space last month, the push and pull between nations over the LEI is indeed starting to occur.