Unlocking New Business Value Through Data Management

The 2014/2015 FIMA Financial Data Management Benchmarking Report

2 2014/2015 Financial Data Management Report

Unlocking New Business Value Through Data Management

IntroductIon

Financial services institutions are facing a myriad of evolving challenges as the industry continues its tentative recovery. For reference data executives, this means new demands on data management with an ever-increasing emphasis on quality and governance. Regulatory requirements are necessitating improved transparency, which is driving the adoption of new data types and management systems. Data integration and rationalization are becoming more and more difficult as firms work with multiple vendors to consolidate their reference data. And instead of simply responding to all of these challenges, data managers are being asked to create all new opportunities to help elevate their businesses.

As Jennifer Ippoliti, chief data officer at Raymond James, put it, “[we] are dealing with new technologies out there and being asked to cut costs and manage risk while creating all these transformation opportunities.”

Charged with using data to create new business value, data managers have increasingly turned to solutions providers to better organize and leverage reference data. In fact, according to the 2013/2014 FIMA Financial Data Management Report, 39% of companies spend more than $5 million per year on vendors and software solutions providers. In turn, vendors have begun to develop tools and services to help financial institutions mitigate risk, rationalize reference data consumption and consolidate databases.

Leading solutions provider IGATE has developed a holistic, end-to-end Reference Data Management Solution (RDMS) to help businesses unlock new value from data. Their RDMS manages everything from vendor data rationalization to enterprise reference data architecture design and integration, and even handles automated data cleansing and distribution. This sophisticated tool is just one way solutions providers are helping organizations meet their new data management needs.

The present study evaluates these challenges using research conducted at FIMA 2014, the Financial Information Management conference for reference data professionals. While the findings confirm the multifarious challenges facing financial services data managers, the study also points to the fact that many of them have made strong progress on key initiatives ranging from regulatory compliance to the implementation of centralized data management systems. These results were compiled from the responses of the survey’s 49 participants, who represented companies including Fidelity Investments, Northern Trust, Morgan Stanley, Goldman Sachs and JP Morgan.

Table of ContentsIntroduction ..................................................2

Research Findings ......................................3

About IGATE ..............................................13

About FIMA/WBR & WBR Digital ................................................14

Why Else Should You Attend FIMA 2015? ................................15

3 2014/2015 Financial Data Management Report

data ManageMent today: a SnapShot

How is reference data currently managed in your organization?

The vast majority of respondents cited in-house systems as their primary modes of reference data management. Of those respondents with in-house systems, 69% are utilizing a centralized system while 57% are using systems tailored to individual business units.

According to these findings, many companies are still finding value in maintaining separate databases for individual business units, even if they also have centralized data management systems. This could indicate that businesses are facing substantial barriers to enterprise-wide data integration, such as siloed data management or technical obstacles.

11

0 10 20 30 40 50 60 70 80

57%

69%

16%

14%

In-house systems for individual business units

In-house centralized data management

Outsourced (managed services model) for reference data management

Industry utility- shared services model

4 2014/2015 Financial Data Management Report

data ManageMent today: a SnapShot

How far along is your organization in implementing a centralized reference data management system?

With only 17% of participants reporting that their companies still have siloed systems for reference data, it is clear that most organizations are moving toward centralized data management.

However, there is currently only a low level of advanced adoption, with a mere 23% of respondents claiming they are over 80% centralized.

23%

19% 37%

17%

4%

11

0

10

20

30

40

50

60

70

80

Silo systems for reference data

Intermediate level of adoption

Incremental adoption as-per-requirement

Over 80% centralization of reference data management

Other

This reinforces the previous finding, which found that even organizations with centralized reference data management systems have yet to fully implement them and continue to use siloed systems for separate business units. The breaking down of silos is a lengthy and involved process, making the enterprise-wide implementation of centralized systems a longer-term investment for most companies.

5 2014/2015 Financial Data Management Report

What are the key challenges associated with managing Securities / Financial Instrument Master Data for financial services firms?

While response rates for all five issues were quite high, integrating data from multiple vendors was easily the most common challenge, affecting 77% of respondents.

data ManageMent today: a SnapShot

“I don’t think we will ever get to one single data provider. We have multiple data providers and we handle the integration ourselves. We have a data warehouse we built, and now we are bolting on a marketing piece.” –Asset Manager, Major Investment Bank

top prIorIty 77% of respondents

2nd prIorIty 66% of respondents

3rd prIorIty 60% of respondents

Data integration for securities data from multiple data vendors

Multiple securities identifiers across different geographies Integration with real-time corporate actions data Distribution of securities data across clearing, settlement & reporting systems

Lack of unique identifier to track securities processing throughout the trade lifecycle

Unlocking New Business Value Through Data Management

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