08.31.2011
By Terry Flanagan

Data Warehousing Alternatives Weighed

Regulatory focus on data drives out-of-the-box solutions.

Burning issues of data management driven by regulatory reforms are causing financial firms to seek out-of-the-box technology solutions.

“Risk management driven by regulatory and client pressure is one of the hot topics in data management for our clients,”  Brian Sentance, CEO of Xenomorph, told Markets Media.  “Regulation and reduced availability of trading capital is also a driving force behind increased data quality and transparency in financial markets.”

In the derivatives markets, the move to centralized clearing is an industry changing initiative, but there is also much to done in successfully managing portfolios of more complex derivative products following the crisis.

Regulatory focus on data, for example with initiatives such as the Office of Financial Research (OFR) in the U.S., will make more financial institutions to look at data as an important resource to be managed and analyzed as a part of institutional governance, and not just as an adhoc consequence of implementing one system or another.

“Once a data management foundation is in place, perhaps driven by regulation initially, such a foundation will also become recognized as a key source of competitive agility and advantage,” said Sentence.

The data that traders, researchers and risk managers need is often located across many systems. While ETL, middleware and traditional golden copy approaches are useful for data management, they don’t provide the business user with an easy way of analyzing this distributed data.

Companies looking to satisfy the need for business-user access to data across multiple systems should consider a “distributed golden copy” approach, a pragmatic architecture for improving the accessibility, transparency and quality of data in a systems environment that contains many legacy systems and databases.

“This approach involves looking at your existing sources of data, and analyzing whether there are any existing systems or databases that should continue to be a primary source/origin of data, given the difficulty or impracticability of replacing such systems given the resources or timelines available,” Sentence said. “Distributed golden copy is not a single answer, but rather an approach that can work in concert with ETL and data warehousing solutions to improve data transparency and hence quality.”

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