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The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Talking Reference Data with Andrew Delaney: Data Utility – Inflexion Point?

For me, one of the most entertaining and informative sessions at our Data Management Summit in London last month was the panel on utilities. Yes, it was a little busy – with no fewer than six (count ‘em!) panellists – but the discussion certainly got the blood flowing.

The utility panel session at our DMS event in New York on May 13 is shaping up to go the same way. Discussing the prospects for a Utility Utopia will be GoldenSource’s Steve Engdahl, Euroclear’s Martijn Groot, Smartstream’s Joseph Turso, Bloomberg Polarlake’s Roy Williamson and WorkFusion’s Max Yankelevich. With a number of competing parties represented, the debate promises to be a lively one.

Ostensibly, the panel’s remit is to help us assess whether the utility dream of greater functionality at low cost is real. But we’ve recently completed some market research on behalf of Euroclear and Smartstream that may already have the answer.

In case you haven’t already seen it, our new white paper – The Case for a Reference Data Utility – is downloadable free of charge here.

A key finding, to my mind, is that the “Industry has reached an inflexion point in terms of appetite for some form of utility or mutualised data management solution for reference data, as potential cost savings outweigh historical concerns around security and control.”

This is a marked change from similar surveys we carried out for clients in the past two years, when respondents were wary of the utility approach, particularly with respect to key attributes such as security, service levels and liability. The latest research indicated that earlier concerns about liability and service levels seem to have been damped down by the promise of enhanced data quality and a shared response to increasingly stringent regulatory requirements.

For the Euroclear/Smartstream project, we surveyed 15 senior reference and enterprise data management executives from Tier 1 and Tier 2 financial institutions about their appetite for a utility approach to reference data management. These executives identified a number of deliverables that are whetting their appetites for a new model, among them eradication of duplication of effort, cost reduction and mutualisation of a regulatory data management.

Could the data utility concept be an idea whose time has come? A lot of people seem to think so. I’d also note that IBM used our London event as the vehicle for announcing its entry into our space through a tie-in with Goldensource.

With so many significant players piling in, perhaps it’s just a matter of time before the proverbial penny drops. Or maybe it has already?

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