Anthony Malakian: A Data Chief on the Buy Side? Not So Fast
![anthony-malakian-waters anthony-malakian-waters](/sites/default/files/styles/landscape_750_463/public/import/IMG/216/142216/anthony-malakian-waters.jpg.webp?h=373a525f&itok=zNeqXFEa)
As the need for—and size of—data continues to expand, some financial institutions have decided to create a new role, that of the chief data officer (CDO). This person is charged with overseeing the entirety of the firm’s data, managing it, and deciding on the necessary upgrades to platforms and tools that need to be made.
In January 2012, Bank of America Merrill Lynch named John Bottega to the newly created position of CDO, and in the process gave an upper management voice to a data professional. He reports directly to the enterprise CIO, Marc Gordon.
When the announcement was made, Virginie O’Shea, an analyst at consultancy Aite Group, told Waters’ sibling publication, Inside Reference Data, that CDOs are “few and far between” at buy-side firms, due to smaller budgets and personnel. Thus, the role of the CDO has remained almost exclusively at the largest investment banks on the sell side. And even there, it’s still a largely nascent position.
In April, Inside Market Data conducted a webinar and posed the question: Who is directly responsible for your firm’s data infrastructure? Only 5 percent of those in attendance said it was a CDO, whereas over 50 percent said it was the CIO or CTO.
Last month at the annual Buy-Side Technology European Summit, Mike Wright, Man Group’s global head of technology scoffed at the idea of a chief data officer. “As CIO, you should be perceived as the chief data officer,” he says. “It’s interesting that some organizations are hiring or forming CDO roles. To me, that’s unfortunate—the CIO should absolutely be the CDO as well. Maintaining and understanding the quality of the data, the ownership of the data, and how it changes and migrates during its lifecycle, is a core part of what our roles should be.”
Echoes
Chris Sims, CTO at Ignis Asset Management, says the role of data management should fall under the remit of the CTO, and that he doesn’t understand “how that function could be done by someone outside of the IT department.”
BlueBay Asset Management CTO Simon Lumsdon says he is concerned that a CDO might undercut the efforts of the CTO. “You really don’t want to worry that they’ll start pulling against you,” Lumsdon says. “You really should have that strategic vision that’s yours to lead.”
Every month in the pages of Waters, we profile a head of technology at a financial firm. Over the past year, we’ve examined technology implementations at Citadel, Cerberus, Blackstone, Pine River, BlueMountain, Lord Abbett and Co. and a number of other large hedge funds. None of them has a CDO, and the individuals we consulted were an integral part of their firms’ data strategies. Consistent with Sims and Wright, others say the idea of ceding that control would be foreign and undesirable. When I spoke to Cerberus CIO Richard Alexander, he was downright giddy about a data warehouse that his team had built.
I understand a bank like BAML, Citi or JPMorgan appointing a CDO, given the sheer quantity and complexity of the data they consume and need to analyze across their retail, mortgage and capital markets businesses. But I don’t see how a specialist CDO would help a hedge fund … and that includes organizations like the Man Group, Citadel and Bridgewater.
CIOs or CTOs worth their salt should be intimately familiar with and intrinsically tied to their firms’ data management practices. Also, when compared to their sell-side counterparts, buy-side technology heads tend to be more connected to the business and not just the technology, and, in many firms, even sit alongside the portfolio managers and traders.
I also have my doubts as to how much sway a CDO really has. Whereas BlueBay’s Lumsdon expressed concern about the CIO–CDO relationship, I just can’t imagine a situation where a head of data will have the same clout as a CIO and CTO. Even BAML’s Bottega reports to the CIO. Chief data officer has a nice ring to it, but it’s not a title I expect to see popping up on LinkedIn at buy-side firms anytime soon.
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.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
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. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
SS&C continues Blue Prism rollout, eyes other acquisition targets
The company is focusing on organic growth while keeping its eye on potential acquisitions.
CME: CFTC OKs clearing move to Google Cloud
The CFTC has given the Chicago-based exchange approval to run its clearing and settlement infrastructure on the Google Cloud Platform, while the exchange and vendor have extended their partnership to last until at least 2037.
Once a blockchain cheerleader, Axoni changes its playbook
The fintech, whose origins can be traced back to the genesis of capital markets’ complicated flirtation with DLT, has largely ditched the tech as the foundation of its data synchronization offering, opting for more familiar territory.
The IMD Wrap: Quality drivers—the sticks and carrots accelerating the data quality race
Like a Formula One Grand Prix, data management is a race that can be won or lost. And just as each race is part of a larger F1 championship that pays large sums of TV money to the winning team, winning or losing one race can contribute to winning or losing an endgame with much more at stake.
This Week: Clear Street, Hudson River Trading/Google Cloud, Alveo and more
A summary of the latest financial technology news.
Start-up uses ‘Magic’ to democratize access to AI for hedge funds
Spun out of Brevan Howard five years ago, SigTech hopes its new no-code generative AI offering can help smaller buy-siders even the odds with AI models.
JP Morgan touts DLT, tokens for collateral management
Distributed-ledger technology could make moving non-cash collateral more efficient, said managing director Toks Oyebode during an Isda conference on Thursday.
Waters Wrap: The changing definition and perception of blockchain
Anthony says that questions of definition and perception are killing DLT projects in the capital markets—oh, and a lack of proven implementations.