The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

A-Team Report: Complex Instruments Demand Overhaul of Data Management by Buy Side

Share article

Following last month’s webinar on derivatives and data management, A-Team Group and EDM vendor GoldenSource have released a report on the specific challenges faced by global reference data managers in buy side firms, with a particular focus on the impact of OTC derivatives. The report involved discussions with a sample of senior individuals directly involved in buy side reference data management from the top 100 asset management firms, largely from the UK and US. Of these respondents, 70% had global data responsibilities and another 15% had regional responsibility.

The three main forces driving a re-evaluation of data management identified by the study comprise: business risk, centralised data management and OTC derivatives. With regards to business risk, increased regulation has created a chain reaction of proactive risk management at these firms. Data is now considered to be an asset that the firm can leverage to quantify exposure and make it easier to comply.

In accordance with last year’s study on the same topic, most buy side respondents classified themselves as having centralised data management or decentralised data management with central controls. This year, 28% stated they were in transition to one of these two data management styles. The report indicates that derivatives in particular are causing firms to re-evaluate these centralised processes. Recent events, growing business demands and complex instruments have raised the bar for the flexibility, disciplines, and tools necessary to run an effective central data operation, the report states.

One respondent noted: “Derivatives are a caveat for us to look at processes again.” Another stated: “We need to centralise to meet the growing need of downstream applications, especially for derivatives. We have trouble handling that data in current systems.” A number of respondents felt they needed to provide a more systematic and robust solution than Excel for the downstream data management of derivatives before this data could be merged into a central database.

This uncertainty around how to manage the business-driven take-up of complex instruments is causing havoc with existing data management solutions, particularly older in-house systems, the report explains.

Related content

WEBINAR

Recorded Webinar: Last minute preparations for SFTR: What still needs to be done and are we ready?

The regulation clock is ticking. Financial firms, especially those subject to Phase I of implementation, are well aware of the impending April 2020 deadline for the Securities Financing Transactions Regulation. The question is, are they ready? Tactical, i.e painful, approaches to compliance won’t be good enough. A strategic plan of attack is necessary to combat...

BLOG

NeoXam Partners With ICE on Pricing, Reference Data

Financial software firm NeoXam, which specialists in transaction software solutions, has integrated ICE Data Services’ pricing and reference data into its Enterprise Data Management (EDM solution). The new partnership will give NeoXam customers access to pricing, fixed income evaluated prices, reference data and corporate actions from ICE Data Services. The data will be available through...

EVENT

TradingTech Summit London

The TradingTech Summit in London brings together European senior-level decision makers in trading technology, electronic execution and trading architecture to discuss how firms can use high performance technologies to optimise trading in the new regulatory environment.

GUIDE

Enterprise Data Management

The current financial crisis has highlighted that financial institutions do not have a sufficient handle on their data and has prompted many of these institutions to re-evaluate their approaches to data management. Moreover, the increased regulatory scrutiny of the financial services community during the past year has meant that data management has become a key...