Michael Shashoua: Central Potential
If coupled with more direct data sourcing and implementation of standards efforts, the centralization that has taken hold in data management could yield benefits beyond what that trend has done on its own. The greater use of centralization has become evident in the increased popularity of the investment book of record (IBOR) to get a more accurate view of portfolio positions. IBOR provides access to positions in real time, and consolidates implied orders, executed orders, and confirmed trades, producing “one version of the truth,” says SimCorp’s John Mayr. An IBOR can also aggregate data from multiple sources and track independently created positions.
Recent developments also include centralization work. The Depository Trust and Clearing Corp. (DTCC) began working with global banks to combine legal entity hierarchy, know-your-customer (KYC), and other compliance-related data. The DTCC has also partnered with Omgeo on a project to centralize standing settlement instructions for all products and regions into Omgeo’s Alert database. And, in the legal entity data field, senior data executives have been pushing for a consolidated file of the pre-legal entity identifiers (LEIs) already in use.
Starting at the Source
Centralizing data is all well and good, but central and complete databases that do not conform to current standards and aren’t easy to update, are about as useful as an offline Palm Pilot in the age of the iPhone and Android. Another growing drumbeat in the industry could, if brought to fruition, ensure that the flow of data into a centralized database would be more accurate. That is the idea of generating identifiers closer to the issuing source of a security. One London data operations executive from a global firm suggests exactly this, adding that could best be achieved in collaboration with Swift.
Also, during the European Financial Information Summit in September, University of Dundee analytics professor Mark Whitehorn said that the value of big data is derived from its support for more targeted and complex queries that can yield greater insights from greater amounts of data. Coupling more accurate, closer-to-the-source reference data with more comprehensive search capabilities, and embedding that pairing into the core of a newly centralized database, would advance the usefulness of reference data for the industry.
Setting Guidelines
These advances won’t happen without plans, rules or guidelines. Industry groups are active on this front. The EDM Council and Object Management Group (OMG) have been developing the Financial Industry Business Ontology (FIBO), a semantics standards initiative. State Street’s David Saul, a prime mover in the FIBO effort, says many parties in the industry have a stake in FIBO’s success, thus encouraging the collaboration that has produced this standard for communicating information about entities and relationships. Data management professionals can now write FIBO-based programs that indicate items that are equivalent, reducing the need to translate data.
The capabilities and methods that could be embedded in data centralization represent a great deal of untapped potential.
Data semantics standards may have a positive effect independent of centralization, but that benefit could grow exponentially if they are used as the standards for data being obtained right from the issuing source and then fed into a central database; embedded into the operating systems to help support IBOR calculations; or used to govern legal entity, standing settlement instructions, or other types of reference data being centralized.
Tying together trends in data management methods may just be theoretical right now, for the most part. Yet for data management professionals concerned about accuracy in their systems and leveraging their domain to better serve their colleagues in other units of an investment firm, the capabilities and methods that could be embedded in data centralization represent a great deal of untapped potential.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
Firms worry that lack of ‘explainability’ will be regulatory roadblock for AI
Industry experts share their concerns about advanced AI’s ‘black-box’ nature and how that may attract fragmented regulatory scrutiny.
Waters Wavelength Podcast: Talos’s Samar Sen
Samar Sen, head of Apac at Talos, joins the podcast to talk about the institutional tools in the digital assets space.
The capital markets’ appetite for AI is evolving ... slowly
Nyela checks the vibe of generative AI, which is slowly evolving from frenetic conversations to tangible tools and use cases.
Waters Wrap: Quants, CDOs, and the blending of job titles
Anthony explains how a quant at a massive bank taking on the CDO title hints at larger industry changes.
Caveat creator: GenAI giants’ pledges won’t pre-empt copyright suits
Tech vendors offer indemnities on generative output, but end-users need to check the fine print, warn IP lawyers
Capital markets firms wary of cloud overspend
Data architects highlight cost concerns as more and more institutions look to use the cloud for data storage and management.
This Week: ION/LuxSE, BNY Mellon, Nasdaq, and more
A summary of the latest financial technology news.
Most read
- IMD & IRD Awards 2024: All the winners
- Waters Wavelength Podcast: Bloomberg’s Tony McManus
- Best evaluated pricing service provider/vendor—CanDeal Data & Analytics