Since its acquisition of Reference Data Factory (RDF) back in October last year, First Derivatives has been working on integrating the reference data solutions into its overall portfolio for a more holistic approach to the market, explains Dale Richards, who was recently appointed as president of the vendor’s US operations. The next port of call this year is the development of a high performance reference data management software suite to fit into the overall Delta RDF portfolio, which is being developed with some components of First Derivatives’ other solutions mix and matched to RDF’s existing functionality.
Richards, who is leading the vendor’s push in the North American markets and remains at the helm of its reference data efforts, explains that the acquisitions and deals First Derivatives has made over the last few years have enabled it to build up compatible capabilities in order to launch a high performance solution. The vendor acquired foreign exchange trading platform Cognotec back in February and signed a partnership strategy with high-performance data management platform Kx back in January last year, for example.
The focus of a high performance reference data solution is supporting front office functions such as algo trading, says Richards. “We have taken some of the main organs of RDF and replaced them with First Derivatives components such as workflow capabilities and a high performance engine for data processing,” he explains.
The solution is currently at the proof of concept stage and is due for release at an as yet unspecified date later this year. Richards also indicates that a couple of prospects are already involved in discussions with the vendor regarding the solution. “This is really in line with the current blending of the different silos of data across an institution. There is a real desire in the market for a more holistic data architecture approach and we are especially seeing interest in this from smaller firms in the market,” he elaborates.
The high performance approach to reference data is indeed becoming ever more popular within the financial services community. Back in February, UBS’ executive in charge of market data sourcing and strategy David Berry indicated that the bank is using Celoxica’s hardware appliance-based data feed handlers to process its market and reference data, for example. Other vendors are also taking an interest in the high performance space, especially those in the risk data business such as SAS.
For now, however, the Delta RDF suite is built on a three pronged approach to the reference data space: data acquisition, modelling and distribution. These loosely coupled components can therefore be deployed individually or in concert with each other and can be layered on top of other vendors’ solutions, says Richards.
He is also positive that the sales pipeline will be healthy this year for Delta RDF in particular. To this end, the recent Algorithmics win for the Delta RDF platform is not the vendor’s first this year, merely the only one that has been declared publically. “Algorithmics is using the solution as the reference data engine at the heart of its managed services business,” explains Richards of the deal. “It is being used as a multi-user platform that can process data on a client by client basis.”
Richards reckons the RDF approach is proving popular in the market because many firms already have centralised data warehouses and in-house platforms in place but want to build on top of these investments and thus First Derivatives’ toolkit is a more attractive option. “It is not an enterprise data management (EDM) approach per se, rather it is building toolkits around reference data functionality that is needed on top of an already existing platform,” he elaborates. “Thousands of banks and brokers have already invested in EDM and have their own in-built capabilities and we have therefore focused on building out our toolkit to augment these in-house capabilities.”
In terms of geographies, Richards notes that three deals emanating from the Asia Pacific region are on the table at the moment. The vendor is also seeing interest from the Middle East, Europe and North America from what he calls a “diverse and evenly spread” demographic of sell side firms, buy side firms, hedge funds and vendors.