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A-Team Insight Blogs

EDM Council Publishes its Naughty and Nice List for 2010: Some Possible Points of Contention?

There can be no doubt that systemic risk is ‘in’ for 2010; regulators will make sure it’s a key focus for financial institutions via key legislation such as that around concentration risk. But has the concept of a reference data utility really replaced the idea of managed data services? A few vendors may disagree with that suggestion included on this year’s EDM Council ‘in’ and ‘out’ for 2010 list.

So, systemic risk has certainly replaced credit risk in the minds of the regulators as a suitable measure for financial institutions to judge their firm-wide exposures: EDM Council is on the money there. But is data harmonisation really likely to replace vendors mapping data complexity and providing cleansed data to the community?

EDM Council has done a lot this year to promote standardisation, from meeting regulators to raise the issue of reference data standards in general to championing the specific goals of various utilities including the European Central Bank’s (ECB) proposals.

However, the utility space has proven to be a rather controversial one (see our Sibos and FIMA coverage for proof) and not all are convinced that a utility is a viable solution in the short term, if at all in some cases. Data harmonisation has long been the goal of the industry and a lot of airtime has been devoted over the years to discussing how to get there.

Thus far, there have been a lot of failed endeavours; MDDL and GSTPA are just two. This is not to say that any standardisation effort is doomed to failure, some efforts have been largely successful – look at Swift ISO standards in the payments world and FIX Protocol in the front office.

However, a dose of realism may be needed in the short term. Firms are currently under a lot of pressure to cut costs and meet regulatory requirements and may therefore have a lack of interest in anything that is not regulatory driven or presented in such a way that compels them to invest.

The ECB is certainly being cautious about its approach to the space: it has repeatedly stressed that it does not want to be seen to be leading the market down a road that is not warranted by industry demand. It may therefore be early days yet for a utility and it is likely that mapping data complexity will continue for some time too, especially as firms are engaged in meeting the regulatory community’s strict compliance deadlines.

Regulators may impose some data related requirements on the industry, but it has not yet definitively come down on the side of a utility. Perhaps this is something for 2011? Do you agree with the rest of the list? Are there any particular areas you feel are especially noteworthy for 2010?

What’s In

What’s Out

Systemic Risk

Credit Risk

Data Harmonization

Mapping Complexity

Office of Data Management

Data Management within IT

Reference Data Utility

Managed Data Services

Source Tagging

Data Scrubbing

Principles Based Oversight

Prescriptive Regulation

Central Banks

Regulatory Agencies

Jump to Default

Value at Risk

Single Name Exposure

Entity Hierarchies

Business Semantics

Data Definitions

Data Management Maturity

Business Process Reengineering

Bank Identifier Code

Issuer / Guarantor Identifier

Capital Adequacy

Capital Leverage

Comparability

Consistency

No Place To Hide

Too Big To Fail

Structured Finance

OTC Derivatives

Transparency

Disclosure

Data Manufacturing

Data Reconciliation

Data Foundation

IT Infrastructure

Interdependencies

Tactical Solutions

National Institute of Finance

Regulatory Data Silos

Entity Identification

Instrument Identification

Metadata Repositories

Spreadsheets

Compulsion

Logical Business Case

Supply Chain Management

Data Transformation

Tags and Identifiers

Cross Referencing

Data Culture

Organizational Alignment

Value to Business

Cost Containment

Collaborative

Proprietary

Do More With Less

Business Case ROI

Understanding Client Requirements

Data Management Metrics

Additive

Duplicative

Content Standards

Format Standards

Manage By Exception

Legacy Challenges

Accountability

Data Maintenance

Statutory Authority

Regulatory Enforcement

Root Cause

Find and Fix

Consolidation

Acquisition

Fit For Purpose

Clean And Consolidate

Source Systems

Transformed Truth

Front-to-Back Linkages

Point Solutions

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