There really is no better time than now to build a business case for investment in data management, said Lorraine Waters, global head of reference data management at Royal Bank of Scotland (RBS), to delegated at last week’s FIMA conference in London. Highlighting the current strategic role of reference data within her own organisation and the investment that it has made in the development of centralised reference data stores, she reiterated the call made by Deutsche Bank’s Sean Taylor for data managers to seize the opportunity to gain business buy in.
The data management industry has come a tremendously long way over the last 20 years, but it is really in the last four years that it has had the opportunity to demonstrate how it can make a difference to the business overall, said Waters. “The last four years have been pivotal in the evolution of data management, with the gradual acceptance of centralised data management services as a result of regulatory and client pressure. MiFID and Basel II have contributed to the success of enterprise data management (EDM). But have we finally arrived at our destination?” she pondered.
As well as regulatory and risk management drivers, at RBS, Waters has benefited from the integration push between the investment bank’s own reference data and that acquired during the ABN Amro buyout. The reference data team has therefore spent some of this year focused on decommissioning the legal entity database acquired during the ABN Amro buyout and moving this data onto its centralised RBS system.
Waters discussed the evolution of data management back from when she started and the back office was a poor relation in the 1990s, through to its growth in stature as a result of concerns around Y2K and the introduction of the euro and, finally, to the emergence of EDM as a concept and the push towards centralisation. In many institutions such as RBS the profile of data management has risen and it has gained executive sponsorship, but the journey is far from over, she said.
She referred to the somewhat disappointing results of the recent EDM Council benchmarking survey, which indicates that the concept of data management may be understood, but it has not been put to good use. She could equally been referring to the results of the recent Aim Software survey: with nearly half of its 371 respondents indicating that they are still using terminals for data look-up and processing.
“First firms need to define the scope and vision for their data management projects: what they aspire to cover,” contended Waters. “Then they need to define the delivery model, inputs and processes, by looking to the internal and external consumers of that data. All of this needs to be communicated to all players in the business in order to gain recognition of the fact that reference data is both a business asset and an enabler.”
The development of a compelling business case can be built around meeting regulatory requirements, risk management needs, gaining operational efficiencies and better meeting client requirements, she suggested. “You can retain investment when you focus on regulatory obligations and risk reduction,” she added. “Point to fines and the cost of remediation if needs be.”
RBS has already defined and assigned the roles and responsibilities of data management to the different players within the firm, including the data owners in the front office, finance and risk functions, said Waters. The data stewards sit within operations and the data champions are the heads of various business units. She suggested that other firms could adopt a similar structure, depending on the needs of the business.
Waters measures the success of the rollout of a golden source project by identifying how many systems the data hub is able to interface to, with the goal of reaching 100%. The proof back to the business, however, is all about cost savings, better pricing capabilities and speedier set up for new client accounts, she explained.
“We have gained recognition from the business but we need to maintain the profile of reference data and continually prove its value. We may have defined the strategy but this also needs to evolve with the business and keep pace with standardisation,” Waters warned. To this end, she suggested that benchmarking progress against peers would be of value to the industry at large by validating progress.