The concept of enterprise data management is maturing. As Dale Richards, ex of SunGard and now leading a collaboration of small data management software companies under the banner of Lakefront Data Ventures, points out, the pressures of new business development are forcing a redefinition of what EDM means, and what tools are required to implement an effective EDM strategy.
“Financial institutions know the markets are changing and that the definition of EDM is expanding quickly,” he says. “The discussion has moved on from the STP days with a focus only on failed trades, to encompass much more – how to get intraday and highly available data into a program trading environment, for example. Analytical and historical data are coming into the picture. A firm might know that it needs to accommodate 15 new sources of intraday and end-of-day data quickly, and it wants to control its destiny itself.”
Another familiar driver for the elevation in importance of reference data is increasing regulatory imposition. The need for compliance with standards, rules and regulations of all kinds is a consistent thread running throughout the stories in this issue of Reference Data Review. Stating the bleeding obvious it may be, but compliance is increasingly one of the key drivers for financial institutions to invest in automation, and data is at the heart of all these efforts.
The firms and vendors featuring in the pages that follow are responding to a variety of compliance challenges, ranging from GIPS, to KYC and AML, MiFID and SEPA, to cite just a few of the current acronyms. Whether the focus is performance reporting, legal entity identification, trade data archival, trade reporting, valuation of complex structured products, risk management or adhering to tax law, the underlying requirement for accurate reference data of all kinds is beyond dispute.
The need for clean data to eliminate a major source of trade failure in the STP context is now well understood and remains a major focus of reference data projects. But the pressures of new business development and the growing regulatory burden on financial markets are serving to extend the remit of data projects to include a broader range of information types.
New definitions of the term reference data are starting to appear in the marketplace, with some providers going so far as to suggest that reference data should include everything outside real-time prices. We’re not sure we agree with that – but actually, what we think matters less than what you think, which is why we are undertaking a readership survey among subscribers (more details coming). What does reference data mean to you? What are the data problems that keep you up at night? What areas of data would you like us to cover in Reference Data Review, and why? We have our own ideas of course, and the prospect of a redefinition of reference data to cover an ever-expanding set of information types is an exciting one for us. But we need you to help us to bring you the right insight to support you as the value of enterprise data management grows and the pressure to get your EDM strategy right increases. So talk to us.