The new counterparty data service from Reuters, slated to go live in the second quarter, has emerged as a key component of the reference data element of the wide-ranging global data and technology infrastructure deal HSBC has signed with the vendor.
Reuters describes reference data as “an extremely significant” component of the deal – which gives HSBC a global licence to use Reuters’ data and information across the entirety of its business. And, going further, Reuters’ head of Enterprise Information Kevin Bradshaw says the new counterparty service “will certainly be a very important part of the new deal.”
Reuters has been working with counterparty data specialist Credit Dimensions for some time to develop the new service and had called for input from financial institutions with a view to pre-trialling it prior to launch (Reference Data Review, September 2006). Bradshaw says Reuters is “engaged very heavily with HSBC’s client data services team to further refine the service pre-launch”; he describes HSBC as “an invaluable partner for us as we develop this new product”.
The data vendor is trumpeting the HSBC deal as proof that it is delivering on its “stated aim of extending beyond the desktop to offer a complete business solution for an entire global organisation”.
Says Bradshaw: “The overall deal with HSBC was the result of an intention by them to deepen their relationship with fewer vendors on an enterprise wide basis. This came as a result of our existing relationship with HSBC, and because of the real breadth of service we can provide covering both enterprise information and enterprise software.”
On the reference data side, “the intent at HSBC is for Reuters to be used as a source wherever possible to feed into their golden copy, group wide”, he adds. This won’t happen immediately, he continues, but rather will take time to deploy. “In principle, HSBC intends to rationalise the number of data vendors it has, and I would expect that to apply on the reference data side,” he says.
The Corporate, Investment Banking and Markets (CIBM) division of HSBC bought a global licence for the GoldenSource data management platform and GoldenSource Connectors to provide interfaces to data vendors including Reuters, Bloomberg and Telekurs in 2005, with a view to implementing it initially to support the reference data management requirements of its electronic securities trading platform prior to rolling it out to other systems across CIBM (Reference Data Review, September 2005).
Bradshaw emphasises the collaborative nature of Reuters’ work with HSBC on reference data going forward. “There is a broad range of services we are working with HSBC to develop, some of which are existing Reuters pricing and reference data services, some of which are new,” he says: the counterparty data service is an example of a new service, he continues, adding that the relationship is “broad and deep” and will cover content such as evaluated pricing.
The strategic nature of the relationship is also key, he says. “Once we are able to strike this sort of strategic relationship with such a major and important customer, it means we can start to devote much more time and resource to developing content to meet their needs. We are already starting to analyse aspects of our coverage relative to the content sets HSBC requires, and we will be proactively seeking to enhance them to better meet the bank’s needs over the coming months.” HSBC is the beneficiary of this application of resources and attention, he says, and from the Reuters perspective “partnerships like these help us to improve our reference data services generally”.