AIM Softwares fourth global survey on key issues of reference data management, The Global Data and Risk Management Survey, intends to enable financial institutions to get a comprehensive overview of the status quo in their industry and to show where they need to catch up with regional or global benchmarks.
The survey has proved that financial institutions all over the world are undertaking remarkable efforts to improve and to automate their reference data management, underlined by the fact that 43 percent of companies currently plan to invest in the automation of static data and nearly a third of the respondents intend to invest in the automation of pricing data and of corporate actions. In only 58 percent of all cases financial information is already fed directly into the core banking application. The trend towards increased automation is reflected by a growing number of institutions which are using golden copy management for managing reference data (38 percent).
Generally speaking, financial institutions worldwide are quite content with the data they receive from financial data feeds, though most frequently, the surveyed institutions perceive the cost of the delivered data as too high and are therefore intending to implement alternative data sources where possible. Furthermore institutions wish more and more for an implementation of standards for the delivery of financial markets data. ISO 15022 is gaining acceptance as it is used by 22 percent of the survey participants worldwide in one or the other way. MDDL still is not as accepted as only 5 percent of respondents are using this standard data model predominantly in the U.S., the United Kingdom and in the Asia and Pacific.
Due to increasing regulatory requirements the back office area in financial institutions is gaining more and more importance. In comparison to last years survey, companies pay more attention to the challenges of MiFID, rather than on Basel II as in the last few years. In North America the Sarbanes-Oxley Act is heavily affecting the investment activities in data automation. Besides regulations, the surveyed companies focus on reducing errors and costs associated with back office workflows, which is primarily achieved by introducing improved STP. Additionally, the figures of this years survey indicate a trend towards golden copy solutions with North America leading this initiative.
The management of basic data (61 percent) and the management of price data
(52 percent) were named to be the major objectives of reference data management, followed by the management of corporate actions (45 percent) and the opening of instruments (45 percent).
Although 38 percent of the interviewed companies still rely on proprietary solutions to meet these needs, the number of companies which prefer to buy a data management solution grew considerably from 2006 to 2007: 40 percent intend to extend their facilities by buying an appropriate solution, adapting it to their specific needs.
Further results are available at www.dmstudy.info/2007.
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