Breaking the Bottleneck

Thoughts and concerns expressed this week about data sourcing and the nature of data describe a massive challenge for data managers. It's a challenge that, surprisingly, doesn't seem to have been addressed very much in the industry.

Jeff Zoller, chair of ISITC, cited a striking statistic at the organization's annual industry forum in Boston on March 23: that 80 percent of data available in the financial industry today is unstructured. In a March 25 webcast, Paul Rowady, director of data analytics and research at Tabb Group, described that unstructured data as the massive, ever-expanding bottom layer of a pyramid, which narrows toward an apex of knowledge and insight, creating a bottleneck for all that unstructured data to try to penetrate.

In a panel discussion about data issues at the conference, Jim Northey, a partner at LaSalle Tech, a FIX onboarding specialist for the securities industry, said, "The reality is we haven't been introspecting on our data as much as we should." Other panelists proposed ways for the industry to more closely examine that unstructured data so the bottleneck becomes more like a filter, or ceases to be an impediment to gaining insight from the data.

That begins with making sure data is a "business asset," said Dessa Glasser, managing director at JPMorgan Chase. "Make sure the data means something to your business and you have a very good definition of it," she said. "You need to show that you understand where the data comes from and how you use it."

The key appears to be confronting that mass of unstructured data before the bottleneck becomes an issue. The greater purpose of contending with unstructured data is to be able to accurately manage operational risk. Operational risk is a big enough concern that ISITC is considering a special effort to address it. For that to succeed, the industry must be able to manage unstructured data, or figure out a way to reduce the percentage of what is still unstructured.