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A-Team Insight Blogs

Accenture MRDS to Complement Corporate Actions, Market Data

Accenture’s plans to roll out a Managed Reference Data Service (MRDS), based aroundon Asset Control’s Acdex outsourced data management offering (Reference Data Review, June 2004), is one of several data management initiatives under way at the big consulting firm. MRDS, for which Accenture has been distributing a white paper discussion document, sits alongside similar ventures for real-time market data and for corporate actions, the latter via a tie-in with Depository Trust & Clearing Corp. (DTCC).

This corporate actions initiative – labeled Global Corporate Actions (GCA) Validation Service – has been “a good way to get our feet wet,” according to Bill Cline, head of capital markets at Accenture. He adds that GCA now boasts five, boasting three stand-alone clients, and will with a number of additional prospects in pilot, can now be one of the inputs for the much broader Managed Reference Data Service. For the GCA venture with DTCC, Accenture’s next move will be is into the Asia/Pacific region. U.K. has and New York are already been established GCA customer service centers. For MRDS, Accenture has chosen London as the data cleansing hub for Europe to complement Toronto for North America, and China is under consideration for Asia/Pacific. There are currently around 20 people involved in data-cleansing for GCA and plans are afoot to raise Cline says that numberAccenture expects to between 40 and 50. Cline says theleverage human cleansing resource will be leveraged for useresources across the wider range of managed data services Accenture offers, including reference data and, market data and corporate actions data. Managed Market Data Services is Accenture’s program for outsourcing the operation of Reuters TIB/Triarch/RMDS platforms and also offers users outsourced billing, invoicing and other administrative functions. Cline says that capability will ultimately beis now being blended with the reference data managed service, particularly as the distinction between real-time and so-called ‘static’ data sources blurs. “The current focus on latency,” says Cline, “comes from a rather narrow and myopic view of the challenges that face the industry,” says Cline. “We live in an increasingly data-centric world, where common formats can be used in predictive ways, and the cleansing, aggregating and normalizing of data leads to better economies of scale, higher quality products and fewer compliance hurdles.” Cline reckons MRDS, which already has one charter client, with discussions under way with four more, can build on the success of Accenture’s managed trading room services business. He says firms can enjoy 20% cost savings from deployment of MRDS. Add to that the benefits of a centralized approach to data management and the argument is compelling, he says Cline. “By centralizing data management, clients are able to improve compliance controls and risk management functions and cut into the high costs of data silos,” Cline said. Which is why Accenture was drawn to Asset Control. “Asset Control is the only reference data cleansing technology to useready for a one-to-many ASP model,” says Cline, “and it broadcasts customized datafeeds in a variety of formats, which is the tricky part.” The one-to-many concept lies at the heart of Accenture’s approach to managed data services. One-to-many differs from the traditional one-to-one approach to outsourcing in that services are managed outside the client’s premises and offered to many clients, allowing Accenture to leverage economies of scale that are subsequently passed on as savings to the clients. Accenture’s data management approach was inspired by the identification of a cross-selling opportunity. “Firms typically procure data for their trading rooms separately from reference data,” says Cline. “Our plan is to blur the lines between the distinct infrastructures. Asset Control is a sophisticated ticker plant with the business logic to conduct complex data cleansing.” As it prepares to bring MRDS to market proper – the capability was on show at last month’s SIA Show in New York – Pat Tsien, partner-in-charge of MRDS, stresses the importance of Accenture’s experience with market data and global corporate actions. “As with market data and GCA, we need to prove that we can deliver a quality service,” she says. “We are much further along than if we didn’t have mature offerings in market data and GCA.” Cline stresses that MRDS will accommodate a wide variety of services and platforms in use at client sites, among them Fame (now part of SunGard Data Management Solutions), Financial Technologies International and Cicada. He emphasizes that MRDS is not predicated on limiting choice at the customer site but rather unleashing inherent economies of scale by allowing business processes common to all clients – aggregation, normalization, and cleansing – to be done off premises and before application level integration at the client site. Educating customers on this – together with the cost-effectiveness, control, and centralization benefits of the managed service – is one of the challenges to be overcome, he says. As part of its approach to educating the marketplace, Tsien, has prepared Accenture’s upcoming white paper, ‘Data Management: The Quest for Quality.’ The paper, pitched as a preliminary discussion document designed to stimulate debate and action throughout the industry, offers an assessment of some of the business drivers behind data management, including industry concerns about poor data quality and its impact in terms of direct costs and missed opportunities. It also offers some examination of the various regulatory drivers, including the U.S. Sarbanes-Oxley and Patriot Acts and the European Basel II initiative. Finally, the paper provides an overview of Accenture’s managed services offerings in the data management area, with an emphasis on MRDS and GCA. According to the white paper, MRDS “helps capital markets firms combine multiple data sources in a central database with a common data format. The resulting improvement in data quality helps eliminate a major reason for ‘fails’ and manual repair efforts.” MRDS, says the paper, reduces duplication from the use of multiple data sources and creates consistent data standards across the enterprise. It is available as a business service provider (BSP) option from Accenture, which includes business process outsourcing, through which client employees become Accenture employees, and ASP services. The white paper suggests that one solution to the challenges of poor quality data is the introduction of “centralized administration of reference data … evolving over time to a single ‘golden copy’ maintained by the centralized group.” With such a central repository in place, the paper says Accenture recommends two approaches to ensuring the data is available to the organization’s systems: “A single reference database used by all systems: These systems would no longer contain reference data tables. The advent of Web-enabled databases makes this approach feasible.” “Reference data exported from a central repository and imported into the databases of individual systems: This implies that reference data tables are aligned with the design of the central repository. Technical advances such as replication tools may make this task easier.” In conclusion, the paper reckons the most appropriate approach will depend on a firm’s information architecture, its reliance on legacy systems and factors such as the geographical distribution of systems. The white paper describes the GCA Validation Service as “an industry utility offered by DTCC to deliver standardized, cleansed and validated global corporate actions announcements to all its customers at dramatically reduced risk and lower cost.” Accenture’s role in the venture has involved implementation of the underlying technology and continuing enhancements and operational help.

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