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Data management | Outsourcing


“The reason the golden copy approach failed was that data management vendors were trying to create a single version of the truth that would solve everything. We recognise multiple versions of the truth, which is fine as long as users can trace the information and see how they arrive at a certain point.” Daniel Simpson, Markit


the internet way of doing things – they want data instantly and data feeds that deliver on an intraday basis,” he says. Additionally, there is no longer a concept of ‘back office’ data; reference data is being used across the organisation. “Our clients have been clear to us about what they want; they are looking for full cross-asset, integrated well structured and defined data models and content.” Interactive Data has spent the past two years


restructuring its data model to accommodate these changes. Based on industry standards, the aim is to transform all of the company’s data into real time, streaming data. Meanwhile, Euroclear Bank and SmartStream


have been working on a centralised reference data utility service, called the Central Data Utility (CDU). The Euroclear Bank service will source securities data from data vendors as well as from data originators, such as central securities depositories and stock exchanges. Based on SmartStream technology, securities data processed in the CDU will be validated, cleansed of inaccuracies and enriched before being relayed to clients intra-day in the precise format that the client has chosen. “Capital market firms attribute 35-40% of


all trade breaks they experience to avoidable mismatches in reference data,” says Yves Poullet, chief executive at Euroclear Bank. “The CDU aims to drastically reduce the number of mismatches by providing the highest quality of data accuracy,


Best Execution | Summer 2013


including the use of in-house information and a comprehensive network of other data providers. Webb also argues fundamental changes have


occurred and that the focus among buyside firms is now on investment data. “Firms are quite mature in their approach to data governance and data management, but only in the reference data area. Now that many firms have effective processes for this part of the picture, they realise it is only one part of it. The output data from accounting systems, the transaction, valuations, gains and losses, performance and risk analysis all has to be managed and brought into a single repository because it is the information that regulators, clients and the buyside firm itself, need.” Many vendors are offering a range of services,


including hosting and execution services that are fully managed, says Tanuja Randery, chief executive of MarketPrizm, a market data vendor. “For clients who find that building systems in-house is no longer financially viable, vendors can offer the option to build the system for the client, which can be done faster and more efficiently than building in-house; this model also ensures that clients can keep abreast of the latest upgrades,” she says. “In recent months, we have seen more and more clients choose to outsource services as they deal with the conundrum of having to stay ahead of the competition and meet increasing client demands against a backdrop of shrinking IT budgets.” n


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