Front-Office Data Focus Spurs IBOR Push

“Something that is as hard as anything else is that you have to make that information available to a wide variety of processes and systems,” says Phil Tattersall, founder at buy-side consultancy, Simitas. “If you’re a complex investment manager, you might have a number of different portfolio systems, a number of different OMSs and risk systems, and that information created from your IBOR needs to feed into them as well, or you’re not gaining value from it. That’s tough.”

Wider Views
Some larger buy-side institutions are taking the essential conceit of IBOR as a system and expanding it into a wider data management program. Legal & General, for instance, says that while IBOR is an important component of its day-to-day investment operations, it is just a component of its wider data strategy and roadmap.

“For us, IBOR isn’t an end in itself,” says Lobanov. “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. We’re putting it into a single place and ownership domain, with a centralized function responsible for ensuring everything is accurate. IBOR becomes an aspect of it, a subject area within the data hub. We’re building this with event-driven architecture, so everything happening within the back-office and front-office systems is being fed in real time into this data hub, consolidated, reconciled and checked, and then presented to consumers as a data store that is always up to date.”

Elements of this infrastructure already existed in Legal & General as in-house systems, and the idea is that rather than mothballing the existing software that may already have been built and serves individual purposes well—an Accounting Book of Record (ABOR), for instance—these are integrated into a wider view.

“IBOR is essentially a position-tracking engine, but what we’re saying is that while the investment perspective of an IBOR system is important, there’s a need for a broader book of record bringing a consolidated view of reference and operational data to support a variety of processes in the middle and back office as well, such as ABOR and the client book of record. It’s still the same platform and technology, but I believe taking a broader perspective is more important than just concentrating on an IBOR,” Lobanov says.