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

A-Team Insight Blogs

Asset Control-Sponsored EDM White Paper Explores Balancing Centralized and Federated Data Models

Share article

An Asset Control-sponsored white paper written by TowerGroup highlights the challenges money managers, broker-dealers and asset servicers face in managing their securities technology and operations infrastructures to facilitate faster response to a variety of market conditions, more flexible process, IT and data structures, and an enhanced client experience.

The paper, entitled “Enterprise Data Management Equilibrium: Balancing Centralization vs. Federation in the Securities Firm,” explains how flexibility in configuring processes and IT and data infrastructure is critical in helping firms to reconcile data autonomy with centralization, data sharing with control, and data performance with usability. As firms seek to improve cost positions, risk management and transparency, they continue to struggle with islands of automation, fragmented data sources, and disparate processes. The paper examines centralized and “federated” or distributed approaches to managing data, and offers progressive practices and recommendations for improving processes and data architectures.

“The intelligent application of correct data management is as critical to ensuring the capital markets organization’s success as the core business itself,” Dayle Scher, research director at TowerGroup and author of the paper. “The top challenges of securities firms revolve around data and systems integration, data quality, and process or technology complexity. In fact, firms readily admit that the integration of data remains one of their biggest pain points. Two data models, centralized and federated, are emerging as firms pursue the contradictory goals of autonomy and central control, value-added impact and efficiency. Firms that succeed in choosing the right model for the right function will be rewarded with a cost-efficient, highly flexible infrastructure that is capable of dealing with the tumultuous environment the securities industry now faces.”

Although the traditional, centralized data model provides a single source of data offering a high degree of control and efficiency once it is built, the model breaks down most often when complex business requirements make for challenging data model definitions, database designs, and updating and cleansing processes. This can result in long development cycles and slower time to market. The federated model applies certain elements of centralization while also allowing local sources to retain control of the production, enhancement and dissemination of shared information. The result is faster implementation, information updates and time to market.

Asset Control provides solutions that offer flexible options for centralized and federated data management: the AC Plus platform for data acquisition, centralized exception-based processing and downstream distribution, and AC Invest for on-demand business and departmental data consumption. AC Plus and AC Invest can be used together in a federated model to bring together key enterprise data into actionable form using a hub-and-spoke framework. The solution allows for data to be managed at the corporate level with local enrichment, providing one integrated solution that suits individual business needs within a single organization and creates economies of scale with audited local flexibility. The federated solution can also provide asset servicers with a scalable, flexible infrastructure designed to service third parties and expand income streams.

Phil Lynch, president and chief executive officer at Asset Control, said, “Many securities firms are working on improving their ability to integrate data across geographies, asset classes and functions. We understand that one size definitely does not fit all, and our approach addresses that by providing business-oriented, configurable and flexible solutions to meet a wide range of requirements. Asset Control’s federated model, which incorporates elements of both central and distributed architectures, can help improve data management, valuations and back-office operational integrity, while quickly meeting high-volume and rapid response needs, as well as specific language, exchange or asset class requirements.”

Related content

WEBINAR

Recorded Webinar: Powering Winning Low-Latency Trading Strategies – Gaining an Edge Through Server Performance

This webinar has passed, but you can view the recording here. Trading firms continue to seek faster execution and lower latencies for their high frequency and algorithmic trading strategies. Beating the competition to trade in today’s fragmented marketplace is crucial to avoid price slippage and to maximise alpha. But the competition isn’t staying still, and...

BLOG

Debut Virtual Data Management Summit Highlights Industry Agility

In an extraordinary achievement that attracted over 1,000 delegates and well over 20,000 views, A-Team Group’s debut Virtual Data Management Summit went live last week to showcase the most cutting-edge content from an industry that has shown itself to be both resilient and responsive to the unique challenges presented by the ongoing coronavirus epidemic. Focusing...

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

FRTB Special Report

FRTB is one of the most sweeping and transformative pieces of regulation to hit the financial markets in the last two decades. With the deadline confirmed as January 2022, this Special Report provides a detailed insight into exactly what the data requirements are for FRTB in its latest (and final) incarnation, and explores what needs to be done in order to meet these needs on a cost-effective and company-wide basis.