Banc of America Securities is planning to expand an internal reference database that it developed with Financial Technologies International with the addition of further instruments and functionality.
Alan Rosenthal vice president of IT business architecture at BoA told the recent FinExpo conference in London that the bank has been able to realise $16,000 a month in savings on Reuters feeds, and further savings in Bloomberg charges as well as reduced development and infrastructure costs since implementing the system, based on FTI’s StreetReference product, in the second quarter of 2002. Rosenthal said that centralised reference data management had been fundamental to the bank’s development. “Static data is a corporate asset and the cornerstone of the STP environment,” he said. “Without it, STP is not possible.” Currently the bank has 25 internal users across three areas – program trading, finance and corporate credit. In terms of market segments, the system handles data covering equity pricing, equity options, index options, funds, and fixed income securities and pricing, Within this, data is taken on a range of instruments – common, preferred and convertible stocks, mutual funds, corporate and government bonds (but not yet municipals). This comes from a number of vendors including Reuters, Bloomberg, ADP, S&P and the Options Clearing Corp. Rosenthal told the conference that there are three main areas for expansion: further vendor feeds, further product coverage, and greater data sets. From the vendors, the bank plans to add Fidelity, Telekurs, S&P, Moody’s, IDC and is currently talking to Reuters about getting EJV data. On the instrument side, it plans to add municipal bonds and international securities. “We’ve already added European equities, which actually went fairly smoothly,” he said. In terms of the types of data, the company wants to add corporate actions information, exchange data, calendar information, asset-backed securities and mortgage pools. With the success of the system, it is also planned to add further functionality, including real-time updates to clients, automated quality control and control monitoring. Further down the list is the processing of corporate actions “which I’m wary of as it’s so complicated,” he said. Rosenthal said that BoA chose to go with a vendor solution after originally developing an internal options trading system. “We tried to go it alone with options trading,” he said. “I hand-crafted a database of equities and options data, but found very quickly that it had continual change requirements, plus interfacing to additional vendors was Hell – we started with Bloomberg data, but then realised we needed Reuters as well.” The need to support multiple datafeeds was therefore important in deciding to go with a vendor-sourced solution. Rosenthal said that the FTI StreetReference product provides a platform for the bulk of the data processing, but there is “still a need for a lot of manual intervention”. Within the system, data is taken through an FTI mapper to a database built using Oracle. From there, Rosenthal said, it takes one of two routes: either through MQ Series middleware to be cleansed, or through a perl-based scripting engine for distribution to the subscribers. Currently the database has information on 600,000 securities. Rosenthal said that symbology has been a particular issue. “We have 26 different types of security identifiers in StreetReference – ISIN, Cusip, Sedol, Bloomberg etcetera,” he said. “FTI said that they can support an infinite number of security identifiers, but we then found that this is only true if we have an infinite amount of memory.”