Industry Report Reveals Reference Data Revolution Occurring in the Financial IndustryJune 28, 2012 No Comments
TABB Group Study Spotlights Current Reference Data Management Shortcomings and Charts Way to a Step-Change
- Informatica Corporation (Nasdaq:INFA), the world’s number one independent provider of data integration software, today released new research in conjunction with the TABB Group, spotlighting critical reference data management (RDM) shortcomings, trends and solution investment considerations across the global financial industry.
- TABB Group’s Reference Data Management: Unlocking Operational Efficiencies reveals that, while RDM is “a foundational element” of the financial enterprise, the existing collection of solutions to manage reference data in most firms “is not yet” satisfactory:
- Despite huge investments in RDM over the past decade, a remarkable 86 percent of surveyed respondents are dissatisfied with their RDM capabilities – capabilities that have a direct bearing on risk measurement, compliance, trade strategy innovation and operational efficiency/flexibility.
- Nearly half of these dissatisfied respondents (48 percent) are driven by a broad goal, such as improving outcomes, rather than a specific catalyst like compliance – highlighting that RDM is “very much a strategic, rather than tactical, imperative.”
- 71 percent of overall respondents intend to continue investing in RDM improvements.
- As a consequence, says the study, “the capital markets industry is in the process of transitioning to a new generation of RDM solutions.”
- According to TABB Group, “Centralization of RDM coupled with consistent processing will ensure improved outcomes just at the time when data scale, speed and diversity is exploding and downstream use cases are requiring more heroics.”
- Nevertheless, barriers to optimizing RDM abound; significant obstacles called out in the study, and ideas for overcoming them, include:
- Legacy fragmentation of data, solutions and processes – “Virtual centralization of reference data management” without requiring physical centralization of the data, and “infrastructure-on-demand, or cloud solutions” are both options to be considered.
- Downstream applications dependent on consistent RDM – “Streamlining and mapping these dependencies will contribute to the overall agility of the firm’s data management infrastructure.”
- The study concludes with specific recommendations for “navigating the road ahead,” including:
- Firms committed to bolstering their existing suite of RDM solutions – Should “focus on wrapping the current RDM solution(s) with technology that enables a consistent enterprise data governance process.”
- Firms yet to make a significant commitment to an RDM solution – Should “seek solutions that manage multiple reference data domains in a consistent and integrated enterprise framework,” in addition to enabling data governance.
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- “In the past decade, capital market firms have awakened to the indispensible role of effective reference data management in driving competitive advantage and revenue,” said E. Paul Rowady, Jr., senior analyst, TABB Group and author of the study. “From this survey, it is clear that current generation RDM solutions are not keeping up with the challenges and opportunities around reference data as a strategic tool. The time has come for a sea change, and those firms that are first to embrace emerging fourth generation RDM solutions will be the first to grab their share of the treasure chest.”
- “We are seeing strong evidence of how important it is to address the root causes of existing reference data gaps,” said Peter Ku, director of Banking and Capital Markets Solution Marketing, Informatica. “Additionally, firms are ratcheting up their focus in this area given the heightened regulatory environment, expected regulatory approval of the global Legal Entity Identifier system and increasing costs and risks of operating homegrown and second generation reference data systems developed in the 90s.”
Informatica Corporation (Nasdaq:INFA) is the world’s number one independent provider of data integration software. Organizations around the world rely on Informatica for maximizing return on data to drive their top business imperatives. Worldwide, nearly 5,000 enterprises depend on Informatica to fully leverage their information assets residing on-premise, in the Cloud and across social networks. For more information, call +1 650-385-5000 (1-800-653-3871 in the U.S.), or visit www.informatica.com. Connect with Informatica at http://www.facebook.com/InformaticaCorporation, http://www.linkedin.com/company/informatica and http://twitter.com/InformaticaCorp.