BLOOMBERG ENTERPRISE SOLUTIONS NSIDE DATA OVERNANCE T WFIC 2013

Transcription

1 BLOOMBERG ENTERPRISE SOLUTIONS NSIDE DATA OVERNANCE T WFIC 2013

2 EVENT SUMMARY The World Financial Information Conference (WFIC) is the only global event that focuses on financial data sourcing, compliance and delivery. Held in Portugal October 6 to 9, 2013, the event featured a discussion about data governance with four industry thought leaders. Moderated by EDMUND FLYNN Vice President, Morgan Stanley ANDREA DANESE Global Head of Enterprise Content and Distribution, Bloomberg CHRIS JOHNSON Head of Product Management, HSBC Securities Services MARK JOHNSON Vice President of Global Sales, Asset Control JONATHAN NUTTER Vice President of Market Data Services at State Street Bank & Trust

3 DATA GOVERNANCE DEFINED Data governance formalizes the management of enterprise data, including cost, quality, risk measures and other elements. Implementing a sound data governance framework requires a thorough review of company policy, strategy, security and technology, and it is becoming more critical to hone the aspects of a comprehensive data governance model as new regulations emphasize total accountability. While no industrystandard data governance principles exist, the issue impacts exchanges, consumers and vendors alike.

4 PERSPECTIVES ON GOVERNANCE Banks and data providers see governance very differently. Banks want to connect data governance rules to clear business goals as well as regulatory compliance. Data providers see themselves as collaborators, as well as experts in data management that are uniquely capable of helping financial firms apply good data governance practices, enhance efficiency and achieve accountability. Both acknowledge that high-quality data (accurate, complete, timely and delivered agnostically) and transparent communication among all stakeholders are two prerequisites to a successful data governance model. PACE OF IMPLEMENTATION Some firms are making progress but much work remains. Very few firms have formal data governance procedures in place. In general, firms and vendors will need to work together to establish best practices. Increased audits may force the issue. It is anticipated that new technology will help firms solve complex data tracking issues more quickly. For example, a tracking mechanism for data, similar in concept to the barcode for consumer packaged goods, could help firms determine the original source of a security s price and to what extent it was verified. IMPORTANT TRENDS Effective implementation of data governance depends on executive buy-in. Firms and vendors see this coming from Chief Data Officers (CDO) who can advocate for data governance. C-level endorsement will make it easier for firms to support data governance throughout the entire data life cycle. Transparency among firms and data providers will continue to grow. Right now, much of the regulatory focus is on price and securities valuation uncertainty. As a result, firms have tighter rules in place to satisfy regulators, customers and internal risk managers. The additional scrutiny extends beyond end-of-day and third-party dependent pricing into areas of risk management and compliance. Data governance will help firms meet all of these needs more efficiently. CHALLENGES Data providers and custodians agree that the real challenge of data governance is the lack of control over what happens to data once it leaves the enterprise. As data is enriched and altered, its original source and value become more difficult to follow. Technology solutions, such as metadata tagging and centralized platforms for data acquisition and storage, can help mitigate data quality concerns to some degree. In the meantime, many providers are focusing on the nuances of client workflow and developing a deeper understanding of where data goes, who uses it and for what purpose.

5 QUALITY AND VALUE ASSURANCE Firms under regulatory scrutiny understandably want greater assurance from data suppliers that their offerings have already undergone rigorous controls. Suppliers recognize that data is the fuel that firms need to run enterprise systems. As a result, suppliers have allocated significant resources to process data, refine it and ensure it is complete, accurate and timely not unlike the investment refineries make to turn crude oil into gasoline. Refining data is a unique value that content providers can deliver because they are equipped to do it on a larger scale than the financial firms that consume the information. Scalability helps firms save time and reduce workloads. Another way providers add value is by offering solutions for specific business goals. Bloomberg, for example, is repackaging elements of its Security Master data to help firms comply with Solvency II and other regulations. Asset Control takes a different approach, giving firms tools they can use to cleanse, validate and control data more easily. CUSTOMER EXPECTATIONS Firms are more willing to integrate with vendor systems and data providers, but some concerns remain. One big question is how to protect the integrity of proprietary data when it is used or distributed by a vendor s application. Another is maintaining consistency and quality control from the front office to the back office when firms consume reference data from multiple sources. Cost control is a particular challenge for buy-side firms as market data costs continue to rise. Firms would also like to see more emphasis from providers on common reference data that helps provide transparency to investors throughout the investment process, rather than specialized data that is more valuable to providers. Many firms would like to see licensing models that better reflect the realities of data usage across the firm. Precise data tracking is extremely complex (if not impossible), but data contracts are still structured around usage. Data providers point out the need for balance. Unlimited redistribution of data can put providers at a competitive disadvantage. By the same token, there are many instances (such as end of month reporting) in which data redistribution is harmless. Balance will come from firms and providers working together more closely to understand how to meet client needs. FINAL THOUGHTS 1. Data governance is not optional. Firms need to control data internally and externally. As firms shift away from manual data processing, governance becomes even more critical when processes are automated. 2. Unstructured data is the next big hurdle. In ten years, data tracking will seem relatively simple compared to managing and controlling vast volumes of unstructured data. 3. Communication is essential. If silos still exist within an organization, these barriers need to be removed to improve enterprise communications and set the stage for greater transparency. LEARN MORE TODAY Bloomberg Enterprise Solutions is ready to help financial firms establish reliable, consistent data governance that can keep pace with the industry s needs. To find out more, contact us at BBG_Entprise@bloomberg.net or visit bloomberg.com/enterprise. = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = BEIJING FRANKFURT LONDON NEW YORK SÃO PAULO SYDNEY DUBAI HONG KONG MUMBAI SAN FRANCISCO SINGAPORE TOKYO bloomberg.com/enterprise