CDO Advocacy and Influence

The rise of chief data officers, which posed organizational challenges for financial services firms when it began to get attention last year, is gaining traction and respect, as evidenced in stories in this issue.

Chief operating officers are expected to work with chief data officers on operational changes, according to survey research conducted by Broadridge Financial Solutions and the Economist Intelligence Unit. CDOs can contribute to COOs' changes to operations in response to compliance and governance concerns by aggregating risk data for the necessary risk models, Broadridge's Timothy McConnell says.

CDOs themselves spoke about their approach to data management and governance at last month's European Financial Information Summit, advocating centralization in these functions as the best way to obtain effective oversight of reference data. Reducing data complexity while ensuring its accuracy, if not squarely in CDOs' domain, as Pioneer Investments CDO Edward Boag says, at least ought to go to data architects or big data experts, according to BNP Paribas' Vincent Benita.

Centralization improves data quality no matter who drives it, the CDOs say. Aside from that, CDOs can reach into business development, Benita says, through their work in client information and business intelligence. A year ago, we did not hear about CDOs driving such initiatives, and they were not yet trying to lead by advocating the value of data.

On another front, while industry professionals are still saying that the implementation of the legal entity identifier (LEI) needs a regulatory push to get closer to completion -- as they had said in a feature in our June issue -- or at least to the possible critical mass of one million identifiers being registered, national numbering agencies' (NNAs) involvement and the potential to improve data quality are helping the LEI gain acceptance.

Many NNAs are also choosing to serve as local operating units (LOUs), the direct "boots on the ground" administrators of the LEI in each country. In the US, an NNA such as CUSIP Global Services plays a big role in getting more LEIs completed by making it possible to request the identifier along with an application for a CUSIP number or ISIN code. The London Stock Exchange, which acts as a NNA and LOU, adapts to what numbering agencies capture rather than just capturing the events, its SEDOL masterfile head Emma Kalliomaki says.

Finally, this story also includes a look at how the LEI can improve data quality by consolidating and coordinating data, and by distinguishing between similar entities. If CDOs are looking to improve data quality through centralization, certainly leveraging the LEI should be part of their efforts.

Nonetheless, this issue may have captured the moment when CDOs have hit the tipping point in gaining influence or, more pointedly, getting to put their ideas and approaches into practice. The next 12 months could see a lot more of this.