Banking Giants Partner on Data Management, Quality

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Instead of battling data management costs on their own, three giant banks are partnering with SmartStream Technologies Inc. to build a consolidated data management company. By joining hands, the participants believe they can drive down data management costs while boosting data quality.

Indeed, JPMorgan Chase, Goldman Sachs Group and Morgan Stanley plan to launch SPRed (Securities Product Reference Data), a business focused on data management, The Wall Street Journal reported.

Each founding bank is investing more than $1 million in the project, which will allow member companies to "create a stream of consistent data that banks use to help determine pricing and transaction costs." SPReD is expected to launch within six to 12 months, the report stated.

SmartStream Technologies, a software and managed services provider, is central to the SPReD startup effort, according to published reports. The company currently serves 70 of the world's top 100 banks, focusing in such areas as post-trade processing, data management, and trade acceleration services.

Amid the data quality and cost opportunities, the SPReD launch also raises a range of questions. So far, the member companies have not described how much data -- and what types of data -- SPReD will manage. Nor have the member companies publicly described master data management (MDM), data governance or compliance considerations. (Information Management has reached out to the individual companies for additional comment.)

Data Sharing: Opportunities And Challenges

As the digital economy continues to reshape the business landscape, organizations across all vertical markets are exploring potential ways to work together.

Some of the information sharing efforts predate the current big data and cybersecurity waves. For instance, the Financial Services Information Sharing Analysis Center (FS-ISAC), launched in 1999, allows member companies to share cyber and physical threat intelligence analysis with each other.

More recently, National Retail Federation member companies have pursued an information sharing strategy that leverages the FS-ISAC's best practices. And the Alliance for Automobile Manufacturers -- backed by 12 major automakers -- recently launched an information sharing effort to protect IP-connected cars from hackers.

Despite those areas of progress, a range of factors -- including compliance, privacy and competitive concerns -- has hindered information sharing in some sectors. For instance:

  • Technology Sector: President Obama has been pushing companies to share information on Internet threats, but some companies and organizations have pushed back because of timing issues -- particularly when it comes to zero-day threat management.
  • Healthcare Sector: Healthcare providers and vendors were blamed for cross-organization information blocking during a Senate health committee hearing in July. Without proper data sharing in place, true EHR (Electronic Health Records) interoperability can't take hold, according to witness testimony at the hearing.

The Upside in Financial Services

Still, the emerging SPReD information sharing effort is quite different. After all, JPMorgan Chase, Goldman Sachs and Morgan Stanley together are focused on a common high-value need: Better data management at lower costs.

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