The great thing about standards is – as the old adage has it – there are so many of them to choose from. And yet, there never seem to be enough. Last month we charted the industry’s ongoing frustration at the lack of a standard international business entity identifier which, in the view of some, is an absolute necessity for efficient operation in a post-MiFID environment. In this issue, we look at DTCC’s efforts to create a new XML format for delivery of corporate actions announcements, efforts apparently borne out of frustration with the inadequacy of the existing ISO 15022 corporate actions messages to support automated delivery of information. It is not such a long time ago that the ISO 15022 standard was being heralded as the great white hope for corporate actions STP.
In fairness, there do seem to be a lot of happy recipients of 15022 formatted corporate actions messages in Europe at least, and many firms agree they prefer getting data from their vendors and custodians that at least broadly adheres to the standard. And of course there’s a rich seam of business for suppliers of corporate actions systems with the capability to interpret and improve messages whose 15022 compliance leaves a little to be desired.
While it might seem an odd decision for an entity like DTCC, surely in a strong position to influence the standards creation process, to opt to go it alone and develop its own XML format not strictly within the bounds of the ISO 20022 effort, it is also true that what is important is the effectiveness of a message format in practice, rather than the purity of its adherence to a standard either in theory or implementation. If 15022 doesn’t work for some clients, then of course it makes sense to develop a format that does, and enable them to reap the efficiency gains that standardisation should allow.
This shift of emphasis from purist to pragmatist is in evidence throughout the pages that follow, as, it seems, firms’ enterprise data management approaches mature and the focus moves from trying to “boil the ocean” to attacking the problem in manageable chunks, chalking up quick wins and delivering incremental value. This change of tack goes hand in hand with a growing conviction that while operational efficiency and cost reduction are definitely achievable through data management projects, it’s a hell of a lot easier to secure budget for investment in data management if your arguments are based on enabling new revenue generation, rather than on cost savings, however significant they might seem. It is no surprise that the lure of Mammon is winning the day, and standards lovers will just have to be satisfied that the resultant investment in infrastructure will yield downstream STP efficiencies as well as opening up the opportunity to fill the coffers even higher.