November 2015: How to Eat an Elephant

It is no coincidence that in recent issues of Inside Market Data, Inside Reference Data and Waters, data management challenges have accounted for the lion’s share of the editorial. In fact, data matters in general have come to dominate our editorial to the extent that hardly a month goes by where data-related themes are not mentioned in the five or six features that appear in this magazine, such is data’s omnipresence and pervasiveness in pretty much every operational and technology-related business process specific to this industry.  

This trend is mirrored by the amount of time data tends to dominate panel discussions and presentations at WatersTechnology’s various events, irrespective of the hosting brand or their location. And while most capital markets practitioners would admit—if they were being candid—that data and the numerous issues surrounding its effective management tend to be as dull as ditchwater, they are nonetheless hugely important for pretty much all firms to at least attempt to manage as best they can. 

This precedent is likely to continue for the foreseeable future as capital markets firms of all shapes and sizes grapple with the habitually Herculean task of consuming, storing and analyzing ever-growing quantities of data, primarily for trading and regulatory purposes. And, as Max Bowie posits in his monthly column, the time has come for financial services firms to start regarding and treating their data as assets as opposed to a liabilities, and then implement firm-wide operational and technology frameworks to sweat those assets as optimally as possible.

Max references a recent study conducted by WatersTechnology on behalf of Eagle Investment Systems, where one of the key findings was that 80 percent of respondents considered data to be an important asset, yet inexplicably, 60 percent had no data governance structure in place to determine how, when, where and who would be touching their data.

Clearly, the data management challenge facing all industry participants is anything but trivial, but it’s also one that isn’t going to solve itself miraculously or simply go away—it’s here to stay and it needs to be satisfactorily addressed, both for business (trading, risk management and performance) and regulatory purposes.

In many respects, the size of the task facing capital markets firms is not unlike that of eating an elephant. It’s a huge undertaking that in all likelihood will involve a fair amount of discomfort and indigestion. And it’s best tackled cautiously, one mouthful at a time.