The good news to kick off the year with is that reference data is getting more important. It is a major component of the recently announced wide-ranging HSBC enterprise data and technology deal we are told.
Elsewhere in this issue of Reference Data Review there are further indications of this positive trend: a rock solid reference data infrastructure is essential for success in liquidity management in a post-MiFID/RegNMS world, it seems, and addressing reference data challenges is essential for rapid growth in the OTC equity derivatives business. Meanwhile, the transformation of the reference data function from being a purely back office activity to being a vital middle office/trading decision support function is explored on page 20. And one of the key concerns around the approaching MiFID implementation deadline in some quarters of the industry centres on reference data, specifically clarifying the reference data requirements for transaction reporting under the directive. If the Reuters/HSBC enterprise deal is a sign of things to come, as Reuters certainly insists it is, and financial institutions will continue to try to rationalise their data vendor relationships and capitalise on the breadth of content their chosen suppliers can offer, then it follows that to continue to be relevant, the data vendors need to ensure they have the broad and deep content sets required. This validates the trend for vendors traditionally strong in realtime market data to expand their offerings to cover reference data requirements as well, and in certain cases to move the other way and add real-time capabilities to a portfolio traditionally strong on the back office data side. The watchword for success in back office data is quality: if financial institutions want to take the minimum number of sources possible to create their golden copy, then the onus falls on the data provider to ensure accuracy to support that requirement. All this would also appear to be good news for enterprise data management (EDM) advocates. On page 18 EDM Council managing director Mike Atkin looks into his crystal ball to make some predictions for 2007. Not surprisingly he believes the transformation of reference data into EDM is a done deal. But despite the fact that the term still has less resonance in Europe and Asia than it does in the US market, a number of client implementations featured in this issue indicate that progress is being made by firms on the enterprise wide data implementation front, with plenty of evidence of data warehouses/data management platforms being rolled out beyond their initial implementations to handle broader sets of data content and truly become central to financial institutions’ technology and operational infrastructures. Continued success for the EDM providers would seem to be contingent on their ability to ensure their solutions can handle the broadest possible range of content with the highest degree of sophistication, to cope with the varied demands of the different business models among their client bases.