Unique Data Needs Vex Markets
Regulatory reform is raising the bar for data management products and services.
“Increasing calls for transparency and governance and the pure number of regulatory changes on the horizon are putting real pressure on the data management and governance functions,” Phil Lynch, CEO of Asset Control, told Markets Media.
“Data is now a strategic concern with a large number of touch points across the business, bringing with it requirements which are changing much more quickly than ever before,” said Lynch. “The need for the right data management product or service that can support a firm through this is absolutely vital.”
There are, however, certain misconceptions that need addressing.
“The idea that you can impose a monolithic data management structure, with a single data set and a single management tool, onto the modern business with all its complexities is manifestly flawed,” Lynch said.
Firms can’t implement lightweight, siloed systems that will not stand the rigors of today’s volumes and tomorrow’s. This demands a dynamic, federated model that brings together key enterprise data in a centralized environment, while also enabling individual units to own their data rules, mandates and preferences, said Lynch.
“Instead of relying on centralized control alone, data is distributed and made available in a truly actionable and accessible form,” he said.
Vendors need to engage with their customers and understand their problems and their long-term strategy, but few do.
“These are not systems to be changed every five years; rather, they are fundamental to business infrastructure and its ongoing success,” said Lynch. “An out-of-the-box system might look like a quick and easy solution, but it isn’t; it’s just a Band-Aid.”
Capital markets data is the most complicated in the world. “To understand an individual fixed income instrument properly over one hundred fields need to be reviewed,” Lynch said. Traditional data warehouses will struggle with this level of sophistication. This is why firms need to partner with a highly specialized securities data firm, like Asset Control, that understands the markets and how different participants need to access and use data, said Lynch.
Messaging middleware and multicasting have a key role to play in terms of distribution; firms need to be sure these systems can cope with real time versus intraday, or end of day requirements.
Data warehousing and messaging middleware/multicasting “are two very different pieces of technology, but the common denominator is that if the technology and the providers do not truly understand the financial markets and specifically how players are using financial information, the firm employing these systems will quickly find themselves exposed to significant and unwanted risks,” Lynch said.
Data extraction and integration is the second stage of a digitization process.
Financial Instrument Global Identifier enables consistency through trade lifecycle and across institutions.
Spending on ESG data has an annual growth rate of 20%.
Increased electronification has created useable and accessible real-time and historic trade data.
The GIPS standards, created by CFA Institute, are for calculating and presenting investment performance.