Golden Copy: What We Heard At NAFIS

Blockchain surfaced as a topic of interest at the North American Financial Information Summit (NAFIS) this week, but also several other topics including compliance, data science and identifiers. As reported here, attendees who were surveyed informally see it as the top disruptor for data operations in the years ahead. Chris Vickery, managing director and chief operations officer at Nomura, pointed out that, ironically, blockchain makes it possible to get the "single version of the truth," but then decentralizes that information, allowing "multiple editing points and multiple owners of the figures."

A holistic approach also should apply to regulatory compliance, in the view of Alex Tsigutkin, CEO of AxiomSL, a regulatory reporting solutions provider. "Instead of trying to handle each individual regulatory requirement or initiative as a separate project, most of them have the same data management framework to source the information once and use it many times for many internal regulatory requirements," he said. "The less siloed projects you have to tackle regulatory reporting issues, the better chance you have to do it more efficiently and cost-effectively."

Thinking About Data Science

Another theme or approach that repeatedly creates a buzz in the industry is data science. In the past, Inside Reference Data has heard mostly about the use of semantic data in the practice of "data science." Afsheen Afshar, chief data science officer at JP Morgan Chase, in remarks to NAFIS attendees, sees this differently.

"The elephant in the room about data science is that it's 90% data and 10% science, especially in financial services," said Afshar. To carry out typical data science goals such as increasing revenue, decreasing costs, minimizing risk and improving management of human capital, he said firms should map data in service of an actionable insight derived from data science.

In Afshar's view, "Data as a Service" (DaaS) is the answer, which means harnessing and leveraging the "data estate," which is information about where data is, what it means and who owns it. DaaS is geared toward answering human questions about a business issue. The question being asked has to be targeted, has to make sense and has to be leading toward a purpose. As Afshar memorably put it, "at least 10 times in my career, someone senior has asked me, ‘Can't we mine LinkedIn data?' What you should say to that is, ‘To do what? Why? What business problem are we trying to solve?"

So, despite data science possibly seeming to be just another new fad in data management, as long as data science efforts have a solid foundation in a "data estate," they will still mean something and will still be pursued in two years, according to Afshar. If data science is pursued correctly, and the industry doesn't revert to managing data the way it always has, then the sought-after goals Afshar identified can be achieved.

LEI Mission

Lastly, speaking of topics with buzz, a brief note about the legal entity identifier (LEI). LEI has been covered here for at least five years, but may still not be a buzzword to the broader financial services industry, much less the general business world.

LEI has been solidly implemented, as JP Morgan Chase's Robin Doyle emphasized during a panel discussion on the topic during NAFIS. Still, it appears that the obligation to report LEIs is still not as strong as it needs to be. According to the Regulatory Oversight Committee that endorses LEI issuers, more than 415,000 entities were registered as of the end of January. Last year, Francis Gross of the European Central Bank called the number of LEIs registered (which at the time was about 338,000) a "tiny fraction" of what the eventual total should be—and many sources have put the potential figure, or eventual necessary amount of registrations in the millions or multiple millions.

It's apparent now that what the campaign by LEI adoption supporters needs is to push a tipping point that creates an exponential jump in the number of registrations. That will require both strong leadership and greater understanding in the industry as a whole.