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The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Talking Reference Data with Andrew Delaney: To Utility and Beyond!

Another penny has dropped in the onward march toward outsourced enterprise data management. UBS’s decision last month to outsource its securities reference data to iGate, which is using Markit’s Enterprise Data Management (EDM) solution – the former Cadis Software – to manage the data, fulfils a strategic intent to industrialise processes where possible.

Perhaps more significantly for the wider marketplace, the project also acted as a catalyst for iGate, a business process outsourcing firm, and Markit to set up a managed reference data management service that will initially be used by UBS, but is expected to attract three or four more tier one banks looking to outsource securities reference data over the next couple of years.

“This is the first tier one bank to go live with an outsourcing service like this,” says Dan Simpson, managing director and head of enterprise software at Markit. “We are talking to other, similar banks that are interested in a centrally and remotely managed service for their securities reference data. We are offering a managed service rather than a utility as banks do have a lot of commonality, but they also have unique requirements that a managed service can meet.”

The deal coincides with the arrival of Michele Trogni, former CIO at UBS, at Markit, has been made responsible for managed services, forging a kind of Dream Team partnership with Dan Simpson, who himself is being tipped as an executive to watch once Markit’s expected (and possibly imminent) IPO is out of the way.

UBS decided to outsource securities data across its investment banking, private banking and wealth management businesses last year. A rigorous selection process followed and iGate, which UBS had worked with previously, was selected as the bank’s operations provider. In turn, iGate selected Markit as its technology partner, although Asset Control and Goldensource were also thought to be in the running.

The first phase of the UBS project, which will replace more than 10 proprietary and vendor reference data management systems across the bank – none of them from Markit, although the company does work in other areas of the bank – is underway with the Markit EDM solution deployed within UBS at its Zurich and London locations.

Markit has trained iGate staff – recently joined by UBS CTO for group data Tom Dalglish – in the use of the platform and both iGate and UBS staff are loading data onto it. The bank will migrate to a full managed service in a number of phases, with the platform expected to be lifted out of the bank and into iGate data centres around the world in two to three years’ time.

Simpson says Markit is strong in the area of managed services and he sees plenty of opportunities to lift out non-core components from financial firms and provide higher quality, lower cost data management services.

These include a shared service for data management around client on boarding and other KYC requirements that Markit and Genpact are developing and plan to role out in the second half of 2014. Banks working with Markit and Genpact on the first six-month phase of design and development include HSBC and Morgan Stanley.

Markit also runs a shared corporate actions platform based on the Global Corporate Actions Validation Service it acquired from DTCC in June. Simpson says over 60 clients are using the platform and more are interested. The company’s data management work for multiple clients in the loans space is also increasing.

UBS’s latest outsource deal comes on the heels of last summer’s decision by its Luxembourg-based UBS Global Asset Management operation to spin off its reference data platform to Tech Mahindra, a business process outsourcing specialist and parent of London-based investment management technology consultancy Citisoft, an initiative that won Best Reference Data Project in October’s A-Team Data Management Awards.

Tech Mahindra has repositioned the data platform as an offshore reference data utility aimed at meeting market demand for lower cost, high quality data that can reduce risk and increase efficiency.

Introduced under the Tech Mahindra Managed Data Services brand, the the global data utility offers securities reference data across all asset types, reference data for corporate actions, tax information and end-of-day and intra-day validated pricing data, drawing upon 20 feeds from vendors including SIX, Markit, Bloomberg, Thomson Reuters and DTCC.

The company’s first customer is UBS Fund Services in Luxembourg. Under the terms of a five-year services contract with UBS, Tech Mahindra will create and store golden copy data and provide multiple intra-day golden copies to the asset manager. As part of the acquisition and customer deal, Tech Mahindra, which is headquartered in Hyderabad, India, will take on some staff from UBS Global Asset Management who were working on the platform in Luxembourg, but most staff will be located in India.

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