Last year, Deutsche Bank’s director of financial intermediaries Sean Taylor predicted that the “winds of change” were due to blow through the reference data industry and this year’s FIMA saw him elaborate on what has changed thus far as a result of a regulatory shakeup and the profound shift in the way firms view risk management. Taylor noted the increased importance being placed on the data management function that has resulted from his predicted “crackdown” on data, but warned that data managers need to go “back to basics” in order to make sure end user requirements are being met and the “brand” does not suffer.
Data management practices can be key to survival in the current market, but only if they are carried out with the requirements of the business in mind, warned Taylor. “The data must feature useful characteristics for the end user and data items need to be relevant and on time,” he said. “The establishment of rigorous data processes is the key to positive business growth, as long as the data is clean, clear and compatible.”
Taylor indicated that the cost of getting data right is much more accepted across the industry as a result of the desire to restore trust in the financial system by providing increased transparency. He referred to the building of “brand data” that firms can stand behind and use as a strategic resource in order to improve their businesses. Rather than being considered solely as an item in the minus column of a firm’s P&L, reference data can actually help to restore a firm’s brand in a market where transparency is increasingly important (for how not to do it, see the regulatory fines imposed on a whole range of firms this year for their data failures).
The process required to turn this data into a strategic resource, however, is far from simple, conceded Taylor. He likened the process of getting departments to agree on the data quality basics to herding cats and highlighted the need to deal with multiple sources of data and the inheritance of numerous legacy systems. But he noted that time is of the essence, as the “window is shrinking rapidly” on the opportunity to partner with the business and drive through change. After all, bankers may soon forget the post-crisis chaos and the importance of data quality along with it.
“It takes two to tango, so engage with your business partners and get them on board as soon as you can,” he told delegates. “Don’t waste time trying to make bananas look like apples, work with the data formats that you have from your multiple data silos. Work with the apples, oranges and bananas, but make sure they are cross referenced and make sense to the end user.”
Taylor indicated that his part of Deutsche Bank is “blessed” with a CEO that appreciates that problems that bad data cause, but noted that careful elaboration of the impact of data management can get business users engaged. He pointed to risk management requirements as an obvious area of relevance with regards to getting senior level buy in to a data management project.