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

A-Team Insight Blogs

We Can’t Solve the Problems with the Same Thinking That Created Them; Radical Solution is Required to Solve Data Problems, says Avox’s Price

Subscribe to our newsletter

Radical thinking on industry business models is needed in such disastrous times, proselytised Avox’s Ken Price at FIMA this morning. He suggests turning the traditional ‘user in the middle sources multiple vendors’ model on its head so that the users, who after all generate most of the data themselves, become the centre of the model and work alongside vendors and other bodies such as tax authorities, registration authorities, and regulators and more. “There’s a huge amount of power in collaboration,” he said.

Highlighting the value that users already have, and that he suggests can be realised through working through vendors such as Avox, Price says that 70% of changes that are made to the Avox database are triggered by feedback from its clients. He acknowledges that many institutions remain uncomfortable with such an approach, but suggests it is a valid approach to addressing data problems.

“What we’re doing here is preventative maintenance. What is the cost of incorrect data if you do not do this?” he questioned. Citing a client example, the client could not correctly identify the risk level associated with any of its own clients resulting in the regulators insisting those clients were categorised as high risk. The implication was that the firm had to increase the capital withheld for potential losses associated with those clients, to the tune of £10 billion. By then addressing the data and risk classifications of its clients this capital was freed up, enabling the firm to invest elsewhere. “The £10 billion number was directly linked to data management by our client,” said Price.

Also, quoting from a recent study commissioned by Avox majority shareholder Deutsche Borse, the average risk event cost has been calculated to be $20 per event. In the banking sector there have been 90 such recorded events and 45 in the brokerage sector in the course of the year. At this level, the suggested budget that should be put aside to cover the losses stemming from these events is $4 million per year.

By addressing data management in a more radical way, and harnessing the power of the users’ own data through collaboration, the significant benefits of improved quality, reduced cost and increased flexibility can then be realised, said Price.

Subscribe to our newsletter

Related content

WEBINAR

Upcoming Webinar: How to maximise the use of data standards and identifiers beyond compliance and in the interests of the business

Date: 18 July 2024 Time: 10:00am ET / 3:00pm London / 4:00pm CET Duration: 50 minutes Data standards and identifiers have become common currency in regulatory compliance, bringing with them improved transparency, efficiency and data quality in reporting. They also contribute to automation. But their value does not end here, with data standards and identifiers...

BLOG

GoldenSource Releases Market Risk Factor Data Standard, Eases FRTB Compliance

GoldenSource, a provider of Enterprise Data Management (EDM) and Master Data Management (MDM) solutions, has created a market risk factor data standard. Called Curve Master Definitions, the standard seeks to provide investment banks with a single risk factor taxonomy for market rates required to price OTC derivatives, including the storage and aggregation of industry standard...

EVENT

TradingTech Summit London

Now in its 13th year the TradingTech Summit London brings together the European trading technology capital markets industry and examines the latest changes and innovations in trading technology and explores how technology is being deployed to create an edge in sell side and buy side capital markets financial institutions.

GUIDE

Corporate Actions USA 2010

The US corporate actions market has long been characterised as paper-based and manually intensive, but it seems that much progress is being made of late to tackle the lack of automation due to the introduction of four little letters: XBRL. According to a survey by the American Institute of Certified Public Accountants (AICPA) and standards...