Rethinking Large-Scale Data Management

Will major firms be able to take a page from hedge funds' playbook?

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Hedge funds are able to be more nimble with approaches to data management. Are large firms too big to ever use the methods those funds develop? Also, the SEC considers a data strategy effort

The data management professionals who share their struggles with us—their efforts to raise the quality of data, make governance plans to respond to regulatory mandates and their firms' own internal imperatives, manage unstructured data and investigate data sourcing—all may have a deeper struggle common to any task they attempt, and that is the size and scope of their firms. Like behemoth ocean liners, they need to make turns in long arcs.

For them, any action has to be like a course adjustment, figuring out how to make a change in direction using existing systems.

This begs the question of whether there is any way to make a meaningful change, other than sinking the ship and starting out from port again in a speedboat. Do firms need to remove and replace the foundations of systems that are not designed to solve new issues that have come along?

Marshall Saffer, chief operating officer of MIK Fund Solutions, a New York-based data management software provider, told us recently that the large financial firms, and also the larger data management service providers who work for those firms, are constitutionally unable to start over with a blank slate. MIK, now in its eighth year, focuses on serving hedge funds, because those funds are not encumbered by "legacy" infrastructure.

"You can help them reinvent the entire idea of data management processes properly," says Saffer.

Large firms inevitably have a much greater challenge than hedge funds do, when it comes to being more nimble with data management. It remains to be seen if it's impossible for them to effectively deploy the same inventive approaches to data management being used in the hedge fund world.

Data Strategy Reaches Regulators

Also of importance for data management professionals this past week, US Securities and Exchange Commissioner (SEC) Kara Stein, speaking at the industry association SIFMA's Operations Conference, advocated the idea that the SEC should open an Office of Data Strategy that would be headed by a chief data officer (CDO) to "ensure a comprehensive approach to data collection, business analysis, data governance and data standards."

For several years, financial services firms have been filling CDO roles to manage data firm-wide from the top, along the lines that Stein described. Does this put the SEC behind the times or make it a latecomer to the CDO party? Stein acknowledged that the SEC may even be behind other countries' regulators' progress on such an effort.

Inside Reference Data would like to know what you think about the advent of regulators becoming interested in higher-level data management, and invites you to share your thoughts on Stein's proposal in our LinkedIn discussion group.

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