Golden Copy: 2016's Biggest Data Challenges Emerge

Industry leaders see centralization of data as most important issue to address

michael-shashoua-waters

Centralization of data as a data management approach is emerging as the greatest challenge throughout all data operations efforts, industry leaders and experts are saying as they look ahead into 2016.

What challenges do data management leaders face in this new year? In a Roundtable with industry leaders and experts published in the January issue of Inside Reference Data, which appears divided into individual Q&As online, each linked in the following analysis, almost everyone has a different answer about what technologies are at the forefront for data management, or ought to be. The challenge that many of these knowledgeable industry veterans identify is how to go about centralizing data.

HSBC's Chris Johnson cautions that centralization through enterprise data management (EDM) systems can reduce flexibility, even though EDM systems continually improve technologically. Dun & Bradstreet's Robert Iati expects the use of consortia (such as the SPReD service) to act as a great catalyst to break down proprietary protectiveness of data by individual firms—and therefore facilitate centralization.

Like EDM, master data management (MDM) has been used to federate financial industry records. Steve Lachaga, a consultant with experience managing data projects for Deutsche Bank and Credit Suisse, says harmonizing EDM and MDM is the next step, and the industry should not be content with good data still existing in silos based on the line of business. As Chartis Research's Hugh Stewart observes, the ability to integrate and manage multiple databases is available and in the mainstream. The challenge—or the focus—ought to be creating an expanded data model that would make it possible to re-use the same data where relevant for compliance reporting and risk management, Stewart says.

Also in the Roundtable, Inside Reference Data checks in with these professionals about the role of chief data officer (CDO) in the industry, because without leadership on data issues, whatever great ideas about improving operations there may be, they will have a tougher time being heard. Johnson sees the CDO role as fluid, with definitions that can vary widely depending on the firm's philosophy about what the person in the role should be handling. Brian Buzzelli of Acadian Asset Management echoes this sentiment but says that immediate demands will direct most CDOs to focus on data quality and adapting data operations to meet compliance and business requirements. However, this does seem to match the challenges identified elsewhere in the Roundtable—deciding the best ways to manage data and organize its collection and analysis.

The importance of all these data issues, and the approaches to addressing them, is starting to extend to the front office—trading operations side—as explored in "Pillars of Support," which finds that CDO leadership can also play a role and that collecting disparate stores of data is also a prominent concern for the front office.

Lastly, this issue contains updates on European regulatory developments likely to figure in all the aforementioned compliance concerns—AnaCredit credit risk reporting rules and BCBS 239 risk data aggregation and reporting rules. Knowing how to respond and comply on these fronts can provide a head start on the data management issues.

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