Deutsche Bank has recognised that a silo-based model for data management is not sustainable and is looking to develop more enterprise-wide focused technology, said Neil Fletcher, IT director for reference data at the bank. The increase in the volume of transactions has meant the production of more reference and market data, which has put pressure on the data reconciliations process in order to ensure data quality. This, in turn, impacts functions such as risk management, he explained to delegates at this year’s FIMA in London
Fletcher is relatively new to the data management game; he has only been in his role for 18 months, prior to which he was a confirmed part of the “siloed business user community”, he said. It is this user sensibility that he hopes to bring to the team, along with his understanding of the downstream challenges regarding data, such as the impact of timeliness and cleanliness of data on risk calculations.
He noted that the increased regulatory oversight in the market, with its increased reporting requirements, has combined with the data volume increase across all business lines to make a compelling business case for investment in enterprise-wide data management technology. The choice is along the lines of efficiency or death with regards to processing data, he noted.
This challenge is easier to conceptualise than it is to put into practice however, due to what Fletcher referred to the siloed “fiefdoms” within every business line. Much the same as many other speakers at industry conferences past and present, he spoke about the individual business line focus on its own P&L as a key hurdle to get past when breaking down silos. These fiefdoms also engender protectionism around their own information, he added, noting an instance during his own time in the front office where users were reluctant to input all the data relating to a trade into the system. “There is sometimes a lack of a will to share data, which means it is difficult to establish EDM,” he said.
Deutsche Bank began its own project by attempting to align the enterprise IT objectives with those of the firm’s overall enterprise business objectives (rather than those of individual business lines). The firm’s chief information officer therefore created this IT strategy in order to avoid an “evolutionary dead end” caused by silos, said Fletcher. This was all with the goal of establishing a coherent data architecture across the firm to support its activities.
“This essentially led to an uptick in our spending on technology during the financial crisis, when everyone else was reining in their budgets drastically,” said Fletcher. The firm is now reviewing all of its major IT projects in order to ensure that they reflect the enterprise’s business requirements. “We are building tactical solutions but ensuring that they are joined together to the central IT strategy on an enterprise-wide basis,” he explained.
Deutsche Bank is gradually evolving towards an EDM model by introducing a layer to interpret and reconcile data from across the business. The focus is on developing a common infrastructure across silos and a golden source for data that is reflective of its business objectives, according to Fletcher. The firm has begun with instrument data but will next deal with client and counterparty data items.
It is hoped that the underlying organisational alignment process will eventually result in the bulk of the build and buy decisions for technology being brought into the data management team, which can then act as an application services provider out to the business. The idea is to develop platform services, says Fletcher.