This post is sponsored by Interactive Data.
Hubert Holmes, Managing Director, Reference Data for Interactive Data, is responsible for global strategy and content development for reference data. As financial services firms work to comply with new regulations and keep up with the competition, managing reference data has become increasingly important. In this article, Holmes talks about some of the biggest challenges and solutions to help solve them.
What are some of the biggest challenges companies are facing in reference data?
Success in today’s markets demands constant innovations: expansion across asset classes and geographies, the creation of new investment and trading strategies, improvements in operations, reporting and client service. At the same time, firms must address regulatory obligations and improve risk management processes. In conjunction with this, the requirement to reduce total cost of ownership (TCO) is key to all organizations as they strive for greater efficiency.
How has the industry changed in the past five years?
Data management has evolved and changed dramatically over the past decade, becoming more complex and strategic. This growing intricacy is reflected in the day-to-day operational, technological and workflow components of how to organize vast quantities of information relating to securities that a firm holds or may be analyzing.
In terms of governance, what should companies keep in mind when trying to solve these problems?
By far, the most important step is one of the first and that is obtaining senior level buy in. So often, projects are initiated that are described as strategically important and yet when changes to current practices and workflow are required it can be a real challenge for resource to be found in sufficient quantities to safeguard the progress of the project. If the project ends up completing behind schedule or at higher cost because 11th hour resource needs to be drafted in, the project is unlikely to be viewed as successful. Ultimately, that would have been a failing of preparation rather than a failing of execution. Governance must be underwritten from the top and must be unequivocal.
How are you helping clients solve operational problems?
Interactive Data has invested in and enhanced our reference data platform to empower firms to reduce their total cost of ownership and simplify their consumption of data across the enterprise. Apex® combines enhanced content coverage and completeness, with a rich data model, a business application layer and a suite of delivery capabilities, to provide a new and innovative approach to the delivery and integration of descriptive data sets. Easy yet flexible delivery of mission critical content removes one headache from the process of change that firms are trying to bring about by implementing wide reaching data management principles.
Where do you see the industry going in the next few years? (Or how will it change? What's the next phase for reference data management?)
Historically, our industry has lagged significantly behind others as far as outsourcing is concerned. We are now starting to see that divergence addressed. There is growing appreciation that there are elements of data and data management that can be safely outsourced. That is being driven by the relentless need to drive down costs whilst reducing risk. The key goal of an asset manager is after all to provide asset management functions, yet behind staff costs, their second biggest cost is almost certain to be IT and the management of data. Interactive Data seeks to position itself as a strategic partner to those firms by providing off site repositories of trusted content, accessible as though they were local to the firm. Without all the overhead involved in local data warehousing that proposition becomes a very interesting one.