Just four months since we completed our survey here at A-Team of data managers and their attitudes towards outsourcing (you can find it at www.a-teamgroup.com), we are already starting to see real results within the business. At the time much of the discussion was hypothetical and asked whether financial institutions would consider outsourcing any of their reference data management processes and under what circumstances.
At that point we saw Banc of America Securities opt to outsource a portion of its pricing data and securities identifiers management to SunGard Data Management Services.
The news in this issue adds weight to the argument that outsourcing is being taken seriously. Finally, we hear some client news from Accenture with hedge fund Citadel signing up to be its charter client for the outsourcing of data consolidation, and a further step of data enhancement (Story, Page 11).
There are rumours of a further few deals in the pipeline for Accenture. Is one of those going to be Wachovia (Story, Page 1)? As you’ll read, Wachovia is aiming to build a solid foundation for its growing business, but sees much of the reference data management processes as commoditized and therefore possibly more suited to offsite management while they maintain the intellectual capital onsite. Given their choice of Asset Control as the data management platform, we’re sure Accenture must be involved in discussions here. Watch this space.
What is striking about these deals is the highly strategic approach that senior management within the institutions are taking to data management in recognition that if done right, it can provide a solid foundation for growth along with the associated operational efficiencies, as well as a giving them a real edge over their competitors.
Citadel, for example, has signed up for a whopping 10-year deal looking at many key aspects of its data management processes. Wachovia’s deal is part of a three-year initiative to develop strategic building blocks to support the corporate and investment banking division, and possibly eventually other divisions within the banking corporation.
Indeed, the HSBC news (Story, Page 1), although not falling under the outsourcing category, is highly strategic. What’s also worth noting about this deal is where the first rollout has been within the organization: to support front office trading capabilities for one of the top three initiatives within the division.
Traditionally reference data projects have been seen as somewhat laborious projects and have been restricted to the back office. Here, it has been implemented on a high profile, glamorous front office project, such is the strategic recognition of the important role reference data can now play throughout the enterprise. We’re looking forward to hearing more as HSBC expands the use of the Goldensource platform.
While all these sales have been going on, we have been preparing for our two panels we’re moderating at the upcoming data conference hosted by the FISD in Rome (and trying to get a group of busy executives together for a joint discussion in between their hectic schedules is never easy!). The event should be a good one with some juicy topics being discussed, even though we’ve just recovered from the whirlwind that was Sibos. See you in Rome.