Front-Office Data Focus Spurs IBOR Push
Nobody really cared about data until the front office cared about it. So says one technical specialist at a UK-based asset management company, when asked about the drivers behind a sudden surge in buy-side interest around the concept of an Investment Book of Record (IBOR). It’s a sentiment that’s often repeated when discussing the topic, which centers on a simple idea: generating a consistent and reliable source of information, which can be used to support investment decisions and the processes around them from the front to the back office.
Typically, the data landscape around this area in buy-side firms has been a fragmented one. While a competent order management system (OMS) will handle position-keeping, overnight accounting batches will provide one view of holdings and cash levels, while risk analysts and portfolio managers might have their own customized views, which, in most scenarios, will provide them with more current analyses. Combining multiple data sources in a variety of formats from various vendors creates a picture of operational risk that is hard to ignore.
“The upper management would almost solely be constituted from front-office people, historically,” says Jon Rushman, professor of practice at Warwick Business School (WBS) and a former managing director at investment manager, BlackRock.
“The operations teams were left to develop standalone systems, often repeating this position-keeping function in every department,” Rushman says. “There’s a view in compliance, in accounting, derivatives margining, and so on, and they are never coordinated because buy-side firms couldn’t install a company-wide platform. Now, the front office has woken up to the fact that they really need this. It’s on the agenda, and I think that people have seen what you can do if you have a single view of your current trading position, constantly available to anyone within the organization. If it’s a single view, and everyone feeds off that, the efficiency gains are enormous.”
One of the reasons why buy-side firms are looking to develop this “single view of the truth” is due to high-value staff like portfolio managers spending large amounts of time performing tasks unrelated to their core competencies—data management assignments, for example.
“For us, IBOR isn’t an end in itself. We’re looking at building a data hub, which will present a consolidated view of reference and market data, as well as operational data generated by supporting business processes such as trades, orders and positions.” —Igor Lobanov, Legal & General Investment Management
“If you’re a successful investment manager then you do intra-day updates anyway, and you do have accurate data at hand, but the question is how much time you spend doing that,” says Igor Lobanov, enterprise architect at London-based buy-side firm Legal & General Investment Management, which manages £370 billion ($552 billion). “If you look across all the fund managers and their assistants, and work out how much the full-time equivalent of doing that work comes to, you can get up to 50 percent of all the front-office personnel running data management instead of investment management. Allowing high-value personnel to focus on their core competencies helps build a business case for developing an IBOR system.”
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 Data Management
Symphony boosts Cloud9 voice offerings with AI
The messaging and collaboration platform builds on Cloud9’s capabilities as it embraces the AI wave in what CEO Brad Levy calls “incremental” steps.
MSCI counts the cost of bank M&A, looks ahead to custom indexes, AI
Cancellations of overlapping contracts following a bank merger put a dent in MSCI’s earnings, but management remains upbeat about the potential of recent acquisitions and new technology developments.
Nasdaq reshuffles tech divisions post-Adenza
Adenza is now fully integrated into the exchange operator’s ecosystem, bringing opportunities for new business and a fresh perspective on how fintech fits into its strategy.
This Week: HKEx's new derivatives platform; GoldenSource; Quonian-SimCorp, and more
A summary of some of the latest financial technology news.
Chris Edmonds takes the reins at ICE Fixed Income and Data Services
Edmonds is now leading ICE’s fixed income and data business as the rush to provide better data and analytics in fixed income builds.
Deutsche Börse democratizes data with Marketplace offering
Deutsche Börse Group is set to unveil its Marketplace, a one-stop data shop designed to simplify and streamline data acquisition and consumption for its clients, while also surfacing data from across the firm to its own users. Jan Stiebing and Sven…
DSB says industry is ready to meet UPI mandate ahead of deadline
The Unique Product Identifier will be required for certain OTC derivatives in the EU at the end of April, following US adoption in January.
Mapping a successful data journey: strategy, execution and sustainability
A well-planned data journey can positively impact an organization’s long-term trajectory. However, it is important to have clarity not only in the strategy but also in successful execution and sustainability for the long haul, argues data veteran Subbiah Subramanian.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- Deutsche Börse democratizes data with Marketplace offering
- Nasdaq reshuffles tech divisions post-Adenza