Credit Suisse First Boston’s (CSFB) reference data group has been working to define processes for managing client entity data globally. The project was driven by a decision within CSFB to centralise the client account opening process three years ago, which highlighted the need for a consistent approach to managing the data attributes related to each client.
Its processes are based on the concept of data quality ownership and accountability. According to Saloni Malalgoda, vice president in the operations department at CSFB, “No single department has full data ownership, rather there are a group of people that are responsible for the attributes, which is covered in our matrix of attribute ownership.”
Malalgoda was speaking at a recent Azdex event on benchmarking business entity data.
CSFB’s definition of data quality is based on accuracy, where data should be complete, timely, and updated in a proactive rather than reactive way, and consistency, where data across all systems should be consistent and updates are controlled and made in one place only.
CSFB effort has not been reflected in a centralised database of all client reference data, as “it would be a beast of a database with huge maintenance requirements,” said Malalgoda. Instead, there is a coordinated approach to managing data held in multiple databases and the team knows “which databases hold golden copy for each attribute, which is then the source for distributing data for that attribute”.
The data owner, usually at the point of capture for the attributes once a new client account is opened, is responsible for providing the definition of each data attribute, the processes or workflow required to maintain the data, and to ensure the accuracy and consistency of the data.
The issue CSFB faced was that once the client opening had been completed, the data owner had no motivation to continue maintenance of the attribute. As a result, CSFB decided to “build up a picture of ‘who cared’, for example, those who were impacted by the attributes and what impact it would have on their business units if the data was inaccurate,” said Malalgoda. She continues, “This has wide impact. It goes into credit risk ratings, financial reporting, operational efficiencies and more.”
This information was collected from business areas including front office, legal and compliance, risk, financial control and operations, and is held within the Attribute Ownership Matrix. Within this matrix there is a value rating assigned to each attribute based on its importance to the firm, and an indication of the priority and how quickly each attribute should be reviewed, such as daily, weekly or year end. Additionally, it is noted if the attribute can be verified externally, such as the legal name, or if an internal process is needed.
To ensure the matrix is kept up to date, CSFB monitors for external triggers, internal inconsistencies, data integrity and other less tangible measures, such as improved trade and regulatory reporting, and fewer trade failures that come through improved data quality. Malalgoda suggested they expect to see an average rate of change of 20% each year. Some participants at the event suggested the number would actually be higher.
Behind this initiative is CSFB’s Reference Data Quality Committee (RDQC), whose members are all consumers of client reference data. The members work to increase awareness of the importance of quality reference data across the firm, ensure processes and tools are in place to monitor data quality, and ensure the ownership matrix continues to be valid. Just as importantly, it is also responsible for developing a business case for each initiative in order to obtain the appropriate funding.
This committee has senior management support and is chaired by CSFB’s chief financial officer, “so we are an empowered group,” says Malalgoda. “We have buy-in across the firm.”
The project so far has covered internal data only. CSFB worked with a selection of vendors to assess its list of attributes, which now total 80. The institution is now building a business case to fund the purchase of vendor services, although this brings additional issues such as managing multiple securities identifiers.