SIX Financial Hones In on Data Quality

Terry Flanagan

SIX Financial Information uses a multistep process to ensure the quality of the data it collects in real time from more than 1,500 sources, including basic reference information, corporate actions and dynamic variables such as the current market prices of about 12 million financial instruments.

“You have to manage data quality,” said Dominique Tanner, head of business development at SIX Financial Information, during an April 14 webinar. “You have to put the data architecture in place that supports high quality data. Very high on the agenda with SIX Financial information is the creation and definition of standards, specifically data-quality standards.”

Tanner added, “We firmly believe that you can only master a process if you can actually measure it. We want to be able to measure data quality and know exactly where we stand in terms of data quality. For that, we have, defined four main dimensions of data quality: timeliness, completeness, consistency and correctness.”

Timeliness of data is the easiest dimension to measure because of the availability of time-stamping. Completeness and consistency are more difficult because it’s necessary to first define data standards first: Is the data set complete? Is all the data for an equity or a bond complete? Which fields need to be filled in what circumstances?

“You have to define all the inter-relationships between those data points in order to be able to measure consistency,” said Tanner. “This is achievable.”

The most difficult is the accuracy of data. “You can only do that by comparing it to another source of that same data,” Tanner said. “Because if you have a record on your database or a data set on your database, how do you actually know that this is the right payment date, the right asset type, etc. You have to go out and search for another source, and then cross compare to ascertain whether data is correct on your database or not.”

The same data quality issues that SIX Financial Information is addressing as a data provider are pertinent to its customers as well, specifically as they pertain to regulations and operational efficiency. “Data quality is an enabler to achieve the goals in all the areas that drive the markets today,” said Tanner. “On the regulatory side you need to provide data to comply with all the new regulations that are coming in, such as BCBS 239. And in order to achieve operational efficiency, industrialization and standardization, you also need very good data quality.”

SIX Financial is developing KPIs (key performance indicators) to measure data quality. “We strongly believe that being able to measure the process and then setting targets for achievement is an important step to kick off the improvement process, and provides a focus for all the staff involved in data quality.”

Feature image via Dollar Photo Club

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