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Reference Data Review First Words

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The potential sale of Soliton could be a sign that our favourite industry – namely reference data management – is reaching early stages of maturity. Such consolidation is essential to the industry’s development and the ultimate aim of sorting out our data problems and automating securities processing.

The proliferation of solutions providers over the past two to three years in response to the growth in popularity of the reference data business, has been interesting for us to watch. But there are now so many providers vying for the attention of financial institutions.

Despite the specialist skills of many small providers who tend to focus on narrower aspects of the business it can prove difficult for them to secure clients. Data management is such a crucial part of a financial institution’s operations that to hand over any portion of it to a third-party requires trust and faith in that provider. It is easier to have trust and faith in a provider that has a strong balance sheet and that you believe is in it for the long haul. The financial pressures that smaller firms are under can be perceived as weakness by clients, sometimes negating the true skills of the employees and benefits of their offerings.

Soliton has secured some clients in the reference data arena on the basis of its knowledge and capabilities as a data feed integrator. But it has also lost out on some deals because of its perceived lack of scale and longevity.

So the news that it has sought the services of Kircher & Co. to look for a strategic investment, possibly in the form of an outright sale, is possibly no surprise to some. Such a move is probably one of the few viable options for the company to secure future growth.

The vendor’s serious discussions with SunGard have fallen apart. We know SunGard is keen to bolster its data management services through an acquisition or two – we just can’t wait to see who it finally writes a cheque to as we’ve been in suspense for over a year now!

We also expect to see other small data management suppliers looking for strategic investment to support ongoing growth in the coming months…

It’s good to see we haven’t had enough of talking about how to handle reference data yet. Another industry body has been set up in the form of the Enterprise Data Management Council. With a slant towards vendor solutions, it is hoped that by involving data management providers to help push through users’ required changes faster than can be done with standards, more progress can be made to help ease user’s data administration headaches. And it wouldn’t surprise us to see Mike Atkin re-emerging as the appointed liaison for the group, although he has now got a new job elsewhere.

How the new council will compliment FISD’s or RDUG/ISITC’s efforts remains to be seen. Although we enjoy the discussions, what we really need to see now is action. At the recent TSAM event, audience members vented some frustration at the lack of progress in releasing standards. That said, one of the few areas to have seen a standard introduced and adopted by vendors – ISO 15022 – has received very little adoption by the users. Are we sure we are focusing on their true needs?

We’re also pleased to introduce our first Reference Data Focus (see insert) highlighting the importance of the EU Savings Directive (EUSD) and how financial institutions really have to wake up to the reality that the July 1, 2005 (yes, that’s right, just days away!) deadline is not going to change.

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