HSBC has rolled out the first implementation of the Goldensource Enterprise Data Management platform as part of a far-reaching program initiated by the institution to support its growing Corporate, Investment Banking and Markets (CIBM) division.
The implementation sees Goldensource providing the underlying data integration platform to support HSBC’s electronic securities trading platform in its first incarnation for fixed income instruments.
It is understood that the project is aimed at pulling together information across the organization to help identify liquidity pools for products starting with fixed income. Given its size, HSBC can have counterparties internally across different regions that may not be obvious, as well as its external trading parties. The project brings together data to provide visibility to the available liquidity pools.
This is then fed into HSBC’s chosen order routing and trading platform from vendor SmartTrade (see sister newsletter Transaction Networks & Technologies, September 2005).
HSBC took the strategic decision that in order to support the electronic trading process, where trades can be conducted within nanoseconds, the underlying reference data should be of high quality and very reliable and timely.
The project has involved integration of customer, counterparty and securities data from both internal and external sources. The primary external data source is Bloomberg, which is no surprise given its strength in fixed income data, but also includes Reuters, Telekurs, Standard & Poor’s, Moody’s and FT Interactive Data’s Exshare.
Immediate Revenue Generation
For HSBC, it has seen results from immediate revenue generation as well as being seen as a differentiating factor for its clients. It also validates HSBC’s investment in Goldensource, but is not the reason for the choice. Indeed, the project was only agreed after an extensive evaluation period, involving other data management providers, through 2004.
The deal was signed in December 2004, initiated in January 2005 and was completed within a six to seven month time frame.
Goldensource has collaborated with SmartTrade under HSBC’s guidance to deliver data into SmartTrade’s trade engine. This has been helped, says Michael Meriton, president and chief executive officer of Goldensource, by the “sophisticated publishing layer we have built that is parameter driven and can automate the process of connecting to any application, including SmartTrade”.
This project is part of a broader set of initiatives that will involve connections to other applications and the addition of other data sources as HSBC builds up its enterprise-wide data foundation.
Meriton says other implementation plans are being discussed, but that he cannot comment on details or priorities. This project is somewhat unusual for a reference data project, in that the first incarnation has been to support a front-office electronic trading initiative.
The reason behind this, it is suggested, is that the electronic trading project is one of the top three initiatives within the CIBM division. Therefore, it is a highly visible project that adds immediate value to the business. It is hoped that this will help to drive momentum for further expansion of the data management foundation through the enterprise.
The enterprise data approach is being supported up to the chief information officer level.