Unlock New Business Value Through FInancial Data Management

Unlocking New Business Value Through Data Management

The 2014/2015 FIMA Financial Data Management Benchmarking Report

2 2014/2015 Financial Data Management Report


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


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.

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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



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%

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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.


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.


“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


the BuSIneSS BenefItS of IMproved data ManageMent

Aside from regulatory requirements, which of the below business drivers are most important for efficient reference data management?

(Rated from 1-4; 1 being the most important and 4 being the least)

Overwhelmingly, 75% of participants cited data quality demands from business users and investors as the most crucial driver for efficient data management.

Ensuring the integrity of data sourced from multiple vendors was the second biggest issue, while respondents indicated that they do not consider data complexity or volume to be highly critical drivers.

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Meet the demand from business users and investors for data quality

1 2 3 4

Ensure data integrity for data sourced from multiple vendors

Manage huge volumes of data

Handle data complexity

75%

11%

5%

7% 20% 33% 40%

7% 37% 51%

59% 23% 7%

11% 9% 5%

(Rating 1-4; 1 being the most important and 4 being the least)


What are the most important benefits of having consistent, accurate and complete reference data that enables a higher rate of STP?


Reducing manual interventions was of primary importance to participants, 40% of whom ranked it as their top priority.

the BuSIneSS BenefItS of IMproved data ManageMent

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Improved efficiency of downstram trading and clearing applications

Seamless integration with risk management and reporting systems

Higher rate of automation

Considerable reduction in the instances of manual intervention

20%

33%

16%

10%10%40%40%

37%21%26%

17%25%

16% 32% 32%

25%

1 2 3 4



the regulatory landScape

With respect to securities reference data, how dependent are the following regulatory requirements on the availability of additional data fields or business process flows?

(Rated from 1-6; 1 being the most dependent and 6 being the least)

58% of participants designated either CCP Clearing or FATCA as the most dependent on data fields and business process flows.

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Alternative Investment Fund Managers Directive

Markets in Financial Instruments Directive

European Market Infrastructure Regulation

Solvency II

Foreign Account Tax Compliance Act

CCP Clearing Under Frank Dodd Act

7%

11%

7%

33%

24%

34% 41% 16%3% 3% 3%

41% 12% 9% 9% 6%

3% 20% 17% 27%

11% 14%

14%

33%

21%

21% 24% 21% 14%

21%

30% 22% 4%

25%

1 2 3 4 5 6

(Rank 1-6; 1 being the most dependent and 6 being the least)

“I think the regulations are great. They are the best thing to happen to data management, forcing firms to conduct business in a precise manner that really wasn’t done before.” –Global Information Architect, Major Corporate Bank

Solvency II was a polarizing answer, garnering 30% of top priority responses as well as 35% of all bottom priority responses. The Markets in Financial Instruments Directive and the European Market Infrastructure Regulation were not considered high priority.


the regulatory landScape

How far along is your organization in including the following new data types to meet the previously listed compliance requirements?

Taxpayer and Employer ID Numbers factor heavily into regulatory considerations, with nearly a quarter (23%) of respondents stating that they are already 70% of the way to including these data.

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Unique Swap Identifiers, Unique Product Identifiers,

Unique Counterparty Identifiers, Legal Entity

Identifiers, Central Counterparty Prices

Complementary ID Codes, Nomenclature des

Activites Economiques dans la Communaute Europeenne industry

classification codes, Look through data, Alternative

Valuation Methods

Taxpayer and Employer ID Numbers

Quality and Accuracy of Counterparty

Data for legal entities involved in trade

and specific data for concluded trades

<10 %

19% 27% 25% 8% 19% 8% 10% 23% 23% 13% 10% 8% 13% 19% 29% 17%

10 % - 40 % 40% - 70% >70%


enhanced SolutIonS & utIlItIeS

What are the most important features of a successful utility for managing financial services firms’ reference data needs?


More than a third of those surveyed cited data governance and control as the most crucial factors for a successful data management utility.

This reaffirms that it is a top priority for businesses to ensure that important data assets are formally managed throughout the enterprise.

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Coherent operating model- processes, tools and tech

Adherence to industry level standards

Defined ownership structure

Efficient data governance and control mechanism

21%

25%

26%

37% 29% 21% 13%

24% 29% 21%

18% 20% 38%

26% 29% 24%

1 2 3 4



enhanced SolutIonS & utIlItIeS

What are the key risks associated with data utilities and the shared services model? (Rated by the level of risk for each)

Data ownership and liability concerns top the list of risks associated with data utilities and the shared services model, with nearly 67% of respondents listing them as high risk.

This once again highlights the impact that regulatory concerns can have on data management solutions.

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0 20 40 60 80 100 Collaboration between banks,

data vendors and standards bodies

Data ownership, audit- trails and

liability

Level of maturity of the available utilities by the

service providers

Data architecture and data lineage

management

High Med Low

33% 45% 22% 43% 48% 9% 67% 29% 33% 44% 46% 10%


Which factors would you consider while adopting a Reference Data Utility?

enhanced SolutIonS & utIlItIeSRespondents overwhelmingly chose accrued business benefits and cost reductions (74% and 67%, respectively) as the most essential factors when adopting reference data utilities.

Revenue increases from fee- and commission-based services were not considered high priority.

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Minimum initial investment / CAPEX

Reduction in operating costs for securities processing

Accrued business benefits

Increase in revenue for fee and commission based services

43%

67%

74%

22%


aBout Igate

IGATE is a global leader in providing integrated technology and operations-based solutions, headquartered in Bridgewater, New Jersey. As a trusted partner to corporations in North America, Europe and Asia Pacific, IGATE provides solutions to clients’ business challenges by leveraging its technology and process capabilities, underwritten by an understanding of domain and industry imperatives. With revenues over US$ 1.1 billion, and a global employee talent capital of over 31,000, IGATE offers productized applications and platforms that provide the necessary competitive and innovation edge to clients across industries, through a combination of speed, agility and imagination. Our core proposition of integrating technology and customer processes in a proprietary way has conformed to the changing customer needs; the ITOPS framework is proving to be the Holy Grail to align better with the new-age business challenges of corporations. Under this framework, we build point solutions that address explicit client issues taking into account the market and industry context. Our solutions are focused on the following industry groups: banking and financial services; insurance; healthcare and life sciences; manufacturing; retail and consumer products; media and entertainment; energy and utilities, and product and engineering solutions. We have built dedicated practices in the areas of Big Data, Analytics, Digital, Social and Mobility that complements our existing service capabilities in Infrastructure Management, Independent Validation, Enterprise Services and Business Intelligence and Business Process Management.

IGATE is listed on NASDAQ under the symbol IGTE.

Regional Headquarters

US Headquarters100 Somerset Corporate Blvd.,Bridgewater, NJ 08807877-924-4283

India HeadquartersPlot No: 158-162P & 165-170P,EPIP Phase II, Whitefield,Bengaluru, 560066+91-80-4104-0000

Visit www.igate.com Email: [email protected]


aBout fIMa

aBout WBr & WBr dIgItal

Started in 2004, FIMA is regarded as the premier reference data management, counterparty risk, and data innovation conference. FIMA was created by the Data Management Community, for the Data Management Community; it brings together 250 leading reference data management professionals, all covering topics that are of fundamental importance to enterprise-wide data management initiatives.

WBR is the world’s biggest large-scale conference company and part of the PLS group, one of the world’s leading providers of strategic business intelligence with 16 offices worldwide. Our conference divisions consistently out-perform their industry sector competitors on the quality of the events we produce and the relationships we nurture with both attendees and sponsors.

In addition to our industry leading conferences, our professional services marketing division, WBR Digital, connects solution providers to their target audiences with year-round online branding and engagement lead generation campaigns. WBR’s marketers act as an extension of your team relieving strain on your internal resources while promoting your brand and solutions to your prospects. Solution providers can target identified accounts or relevant industry/function segments of WBR’s entire global database of over 500K senior-level decision makers.

Media Contact:Andrew [email protected]



Why elSe Should you attend fIMa 2015?

an excluSIve InvItatIon let your voice be heard in the year ahead register to secure your space in the 2015 report

• After hearing dozens of sessions from dozens of references data leaders, you’re bound to come back with something that can help your business.

• 98% of attendees surveyed at the 2013 event considered FIMA to be the industry-leading event.

• 100% of 2013 attendees said they’d recommend FIMA to colleagues. We think that means you’ll like it in 2014 too.

Call our customer service team to get the best available discounts for your firm at 1.888.482.6012, or email us at [email protected]


“Evangelizing the effectiveness of centralized data governance and processing in an environment of immediate gratification is a challenging endeavor. Moreover, finding information management professionals that are effective at this and are dedicated to this discipline is just as challenging. Attending FIMA 2012 provided me with a forum to discuss key data challenges with industry experts. I learned that I am not alone with the challenges I face and I was able to pickup practical approaches to addressing these challenges.”

- Mark Levie, Head of Investment Data Systems, SSGA

doWnload the 2014 agenda noW!

Unlock New Business Value Through FInancial Data Management

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