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

What’s new about the importance of reference data? Not so much as is touted. By Maryann Houglet, Director of Strategic Consulting, A-Team Group

Subscribe to our newsletter

A recent industry periodical spoke of data as “ubiquitous”… touching all corners of an enterprise and becoming the lifeblood of an organization.” Having spent my 25-year career at various securities data vendors, there’s nothing new here.

Data has always driven investment decisions, transaction processing, back office operations, securities administration, accounting, compliance, reporting and so on. Securities identification has always been an essential factor impacted by corporate affiliations and compounded by new instruments and cross-border trading. Difficult–to-find information on fixed income instruments and corporate actions has entailed ongoing risk. And, yes, the people dedicated to getting data right have long been around. 

Many of us recognize how evolution in financial services coupled with technology has taught us a lot about the importance and complexity of maintaining accurate, timely securities data.
High interest rates in the 1980’s increased the need to access bond call and sinking fund schedules; the explosion of mortgage-backed securities necessitated ease of access to pool factors. Both are still key issues.
Rapid expansion in mutual fund investment necessitated more timely pricing and ongoing, growing data demands.
The long-term drive to perfect security master files across the industry has given rise to data and software requirements. STP was a great concept, but a bit of the “cart without the data horse”, underestimating the role for automated data links.
With increasing focus on risk, attention returns to the issuer-issue link.
Lest we forget: the never-ending drive to determine a “correct” bond price or that of any complex instrument.
Now electronic trading – ECNs and Alternative Trading Systems – is upping the ante on timeliness.

The same problem data areas remain on management’s top 10 lists¹. The “reference data” umbrella ties “it” together, but technology and infrastructure are still catching up.

So, why is the industry still struggling to cope with these data issues? Because they’re very hard to solve!
Complex instruments, global investing, legacy systems, and multiple locations make it even harder to be right, timely and consistent.
Complicated data production; back offices are still pulling data off various terminals manually and faxing across locations. Lack of automation introduces error and inconsistency.
In spite of the industry’s drive to reduce redundant data cost and become operationally efficient, there’s still significant redundancy across firms. This is not conducive to a firm adding value in its services.
Regulatory compliance and risk management are big and expanding, increasing the focus on data.
Confluence of all of the above makes it hard to determine data improvement priorities.
What is new?
A significant factor – beyond automation and technology – is data awareness at all levels across the firm and the industry. Yes, senior management is giving data managers deserved recognition, but as important, senior managers are encouraging and supporting thinking outside the box and looking for solutions beyond the firm.

Data centralization across the enterprise could be just a beginning. With new technology options and focus on integration and efficiency, manual intervention could diminish. A shift from intra-firm to inter-firm data sharing – especially for consolidation, validation, cleansing of commodity-like data – could decrease industry redundancy in an operationally efficient way and be a big next step towards a “paradigm shift” in data management.
Time will tell where the shift takes us. In the meantime, it’s good to see the industry empowering the people dedicated to getting data right.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Unlocking Transparency in Private Markets: Data-Driven Strategies in Asset Management

As asset managers continue to increase their allocations in private assets, the demand for greater transparency, risk oversight, and operational efficiency is growing rapidly. Managing private markets data presents its own set of unique challenges due to a lack of transparency, disparate sources and lack of standardization. Without reliable access, your firm may face inefficiencies,...

BLOG

Recently Updated Private-Market Data and Technology Offerings

Capital-market volatility, squeezed margins and geopolitical tensions are encouraging asset managers to look more broadly across asset classes to spread risk and increase returns. Private markets and other alternative assets have been huge beneficiaries of this trend and are likely to continue gaining share of invested capital, with Preqin estimating that investment in private markets...

EVENT

Data Management Summit New York City

Now in its 15th year the Data Management Summit NYC brings together the North American data management community to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

Regulatory Data Handbook 2025 – Thirteenth Edition

Welcome to the thirteenth edition of A-Team Group’s Regulatory Data Handbook, a unique and practical guide to capital markets regulation, regulatory change, and the data and data management requirements of compliance across Europe, the UK, US and Asia-Pacific. This year’s edition lands at a moment of accelerating regulatory divergence and intensifying data focused supervision. Inside,...