About a-team Marketing Services
The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Entity Data is a Natural Extension to Reference Data, FIMA Delegates Told

Subscribe to our newsletter

The industry is moving to an entity driven world and entity data is a “natural extension to reference data”, delegates to FIMA’s Entity Data Management conference in New York were told. This reliance on entity data is evident when a crisis like the collapse of Bear Stearns hits and firms are scrambling to identify exposure, speakers explained.

This recognition has meant that financial services firms are finally investing in infrastructure and processes to improve identify entity exposure and better manage counterparty data. The issue is going up the chain to senior management at the chief technology officer and chief operating officer level, delegates were told. Moreover, mergers are highlighting inconsistencies in identifiers across firms thus raising the visibility of the problem.

Much of the current infrastructure and symbology schemes are 20 to 30 years old and seriously in need of this investment. Industry participants on the various panels recommended fixing the data layer first, before fixing the applications that use the data.

However, entity data management must be a strategic initiative within the firm and not treated as just another project, delegates were warned. Hierarchies have to be built in as a foundation to data management and access and consistency must be ensured via rules and correct “roll-up to a name”.

Because of the importance of identifying entity exposure and tying issues to issuers in risk management, firms are realising the limitations of long accepted instrument identifiers, like Cusips and ISINs, the delegation heard. Fixed income exposure is a particular issue because one entity can issue multiple bonds.

Market data vendors could help firms resolve some of the entity challenges but this must involve a certain type of service level agreement. Furthermore, common standards across vendors should be introduced in entity identification because they currently use different identifiers and this makes cross vendor comparisons difficult. To this end, FactSet has created an entity master file to help tie together its spectrum of vendor data, delegates were told.

Some panellists felt that risk management should drive these initiatives and own the issue of entity identification. It would then become the responsibility of the business areas, which have kept siloed data for a long time. According to the speakers, the current state of play is that there is a hierarchy of risks that firms look at including: credit, market, operational/compliance and capital/trading.

Several firms talked about workflow orchestration and automated processes can be used to help manage both entity infrastructure and counterparty data. In this case, there should be one view of a customer and one client on-boarding process in a firm, speakers explained.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Adding value and improving efficiencies in sanctions screening

Sanctions have been headline news this year. They are growing in number, sanctions lists are changing on a daily basis, and there can be conflict between sanctions issued by different jurisdictions – the whole calling for financial institutions to optimise sanctions screening to reduce risk and avoid potentially punitive penalties of non-compliance. This webinar will...

BLOG

Data – the Answer to Meeting Sanctions Screening Challenges Exposed by Ukraine War

The war in Ukraine has highlighted not only the importance of having effective sanctions screening and control processes in place, but also the compliance challenges of modern sanctions regimes. Within the space of days, far-reaching restrictions were placed on individuals, organisations, companies and states covering large parts of the Russian economy and authorities, with the...

EVENT

TradingTech Summit London

Now in its 11th year the TradingTech Summit London brings together the European trading technology capital markets industry, to explore how trading firms are innovating in today’s cloud and digital based environment to create flexible, scalable trading platforms to support speed to market and business agility.

GUIDE

A-Team Group’s Valuations Vendor Directory 2009

An indispensable guide to valuations professionals seeking providers of services in the asset valuations market. A-Team Group’s latest release in its series of directories – available for FREE download – focuses on vendors of valuations data, models and analytics. But this is not just another list of firms with their telephone numbers – you can get that...