Golden Copy: Cultural Evolution of Data Handling in Japan

When last in Tokyo in 2012, data management executives I interviewed and heard speak in our conference that year all emphasized that the Japanese markets tended to function in isolation. This, they explained, meant the country's markets existed mostly if not only for trading by Japanese firms, in Japanese securities, with other Japanese counterparties—unlike markets in other Asia-Pacific centers such as Hong Kong and Singapore.

Data management functioned in a similar insular fashion, with firms and markets keeping data all in one place, not considering how to make better use of data within their organizations, much less deriving more value from data or leveraging data to communicate and do business with markets and entities outside Japan.

At that time, enterprise data management was slowly starting to catch on, as IT and data expert Raymond Yeung, who was then a technology products executive at Nikko Asset Management, said. Last week, Yeung, speaking on a panel at our Tokyo Financial Information & Technology Summit (TFITS), said regulatory compliance demands, as well as greater demand for alpha, has firms actively looking for new ways to handle data—and definitely not settling for just "jamming it all into one database."

As a result, Japan's firms are now mindful of the need to ensure clean data among trading, performance management and even human resources systems—before aggregating the data. "If they don't have those core data systems clean, forget it, they can't actually aggregate," Yeung said. "It's a cultural change."

With such movement and change in data systems, Japan's markets could begin to set an example for other Asia-Pacific markets. Japan's central bank, the Bank of Japan (BOJ), just last October launched BOJ-NET, a new transaction settlement system. Hiromi Yamaoka, director general, payment and settlement systems department, BOJ, speaking at TFITS, said the bank is considering connecting BOJ-NET with foreign markets' payment systems.

"To modernize the economy, there are a lot of transactions on a cross-border basis and across time zones," he said. "Only a central bank can provide ... a safe haven for settlement procedures."

Yeung's take on Japan's new willingness to consider different ways to organize and process data, as well as leveraging data for functions like risk management, along with the extraordinary statement by Yamaoka that BOJ-NET could interface with foreign markets, portray a very different climate for data management in Japan than there was in 2012. Even back then, Yeung had said, Japan had the opportunity to lead on data process and technology. It's taken until very recently for Japan to reach for that opportunity.