The development of Avox’s online look-up tool for entity data, which it dubbed Wiki-data, is one of the major developments for the vendor over the last year, according to CEO Ken Price. He first elaborated on the idea in detail at last year’s FIMA in London and indicates that the tool has come on leaps and bounds in the meantime as a result of user feedback.
“Wiki-data is really no different from the other look-up tools you have in the market, with a couple of exceptions. One is that the Avox ID is a unique resource identifier and that means the technology industry can link to and from each one of the entities in the database, which is freely available. It has also provided a much wider trigger base – when you look at entities on Wiki-data, anyone in the public domain has an opportunity to challenge the values that they see there,” explains Price.
Interested parties are therefore able to file a challenge to the values contained within an entity record on Wiki-data. This essentially means that a much wider user base is granted access to the vendor’s database and hence is able to provide data quality feedback on the records therein.
The logic being that data quality overall is enhanced by this process. “Surprisingly, our user base also uses Wiki-data. They haven’t historically had a chance to look at our database proactively – it has always been via the submission of an entity of interest list to Avox and we process the list and send it back. This way they can look to see whether we already have the entity and send us an Avox ID so we can transmit the content back to them much more quickly,” he elaborates.
This is just one of the examples of how Price reckons Avox has been able to be fairly proactive in its approach to the market thus far. “Over the past five years, we have been given quite a lot of leeway and opportunity to respond to the changes in the market as a fairly autonomous part of a larger organisation. That autonomy gave us the opportunity to build new product offerings and customise our services in certain ways,” he says.
However, Price is confident that its new ownership will not be detrimental to this progress. The vendor was acquired by the Depository Trust & Clearing Corporation (DTCC) back at the start of July. DTCC’s board members were keen to fill the hole in the counterparty and entity space in their overall offering and hence approached Avox with regards to an acquisition.
As previously mentioned by Price to Reference Data Review, there was also a desire on the Avox side of the deal to broaden its ownership structure in order to be considered as an industry utility. But Price notes that another aspect of the decision was the desire from Deutsche Börse to step away from the reference data business strategically. Despite its utility pitch, Price is quick to assert that there is still room for competition in the entity data space overall and notes the danger of complacency in a monopoly.
“You need other firms to come in and bring another perspective on the problems you are trying to solve. Competition is always a good thing,” he says.
In the meantime, Avox is keeping busy. Another service that the vendor has focused on over the last year has been the development of its corporate updates service, which focuses solely on updates to entities themselves (rather than other corporate actions data such as stock splits or dividends).
The focus is on M&A activity, change of addresses, changes in industries and regulatory status, for example. The development of the Cusip Avox Business Reference Entity identifier (Cabre) in partnership with Cusip Global Services (CGS) is yet another key focus for the vendor going forward.
“We have now got more than 330,000 entities with Cabres and those are linked to the multitude of information that our CGS colleagues provide,” says Price. Overall, he is confident that the market has much more room to grow. Price reckons in the post-crisis environment, the cost implications of reference data management are bringing the data agenda to the attention of the C level.
“They are looking for ways to rationalise costs when complying with regulation and the reality is that information about their clients and counterparties is core information that crosses almost every regulation going,” he explains. “Similarly, this data is important from a risk perspective, so there is something of a perfect storm for counterparty data management at the moment.”
He believes there is a real maturity in the market as a whole with regards to the management of counterparty and entity data. “When you speak to people who have worked at multiple firms, they have gained experiences in this space that they would not have been able to had they not moved around to different operations and different countries,” he explains.
This movement has led to what Price calls a “cross fertilisation of knowledge” across the industry, which is also happening within the vendor community as a result of the increased number of partnerships and collaborations.