Broadridge has built on its experience of delivering managed services for reference data with the provision of a multi-tenant managed service that has a focus on data quality and is designed for both buy and sell side firms.
The Broadridge Managed Data Service covers terms and conditions, pricing and valuations, and corporate actions data across virtually all instrument types. Data quality is driven by service level agreements (SLAs) and guaranteed against a common rule book that is maintained by Broadridge for all clients and client specific rule books. It is measured using dimensions proposed by the Enterprise Data Management Council, including data completeness, coverage, accuracy and timeliness.
The service is based on a platform that has been developed using technology Broadridge acquired with buy-side services provider Paladyne Systems in September 2011. Bennett Egeth, president of investment management solutions at Broadridge, explains: “We bought Paladyne as a buy-side platform for Broadridge, but found the reference data capabilities included in the acquisition were also very good. When we compared the capabilities to those of other reference data management solutions in the market we saw we had something special.”
With a technology stack that was five to seven years younger than those of competitive enterprise data management (EDM) products, Broadridge invested $7 million in its newly found capabilities and developed a reference data management solution fit for the needs of the largest investment banks. It built the solution as a multi-tenant platform that is much like a reference data utility, although Egeth prefers not to use the term, and ensured it can be configured to individual client requirements and scaled as data volumes and client numbers grow.
Egeth says: “This is the only true multi-tenant reference data product offering services to the market. It also differentiates in being market data agnostic as Broadridge is not a content provider. Clients negotiate with data vendors and we entitle access to the data.”
Challenging market concerns that multi-tenanted shared services or utilities will not be able to satisfy the needs of individual clients, Broadridge offers, for example, security masters for individual clients that are based on a common dataset built by the company. Egeth comments: “We do the heavy lifting in terms of scrubbing and cleaning data once, then we map the data to client requirements.”
Broadridge can supply a technology only or hosted version of the reference data management platform, but says the value proposition of the fully managed service is most compelling, particularly for large investment banks that have not centralised data management in house and are looking for a consolidated solution. Egeth suggests top tier banks could save sums in the region of $100 million a year by moving to a fully managed service, with half of the savings coming from reduced total cost of ownership of data management systems and data infrastructure operations, and the other half from reduced quantities of bad data and numbers of staff required to handle it. Noting that every incremental improvement in data saves banks a great deal of money and that bad data drives process breaks and higher costs, Egeth says: “Industry operations are no longer a competitive differentiator. Good data should be an expectation and bad data a differentiator.”
Looking at the data quality requirements of managed services, he says: “Banks are buying SLAs that cover data availability and flexibility to add new data, as well as timeliness of cleaning data and distributing it into their infrastructure.” To meet these requirements, Broadridge has built a data quality engine into its managed data service that includes the rule sets for all clients and rule sets for individual clients mentioned above. The latter allow clients to manage SLAs within the infrastructure of the managed service and independently of other clients, perhaps changing priorities or rules around exception management. For example, a client with a 15 minute SLA may pay more to get the same changes to exceptions made as a client with a two hour SLA. Whatever the requirement, the tools are there for each client to refine its SLA and ensure data quality on its own terms. The data quality engine also provides various data quality reporting options and different types of dashboards that can be configured to meet individual client requests.
The Broadridge Data Management Service has been in production for about four months and is expected to find favour among banks and large asset managers seeking to centralise data management, reduce costs, improve data quality and streamline workflows including regulatory data operations. Egeth says the company is in conversation with six top tier global banks and hopes to name some users of the managed data service soon.