Strategic approach to coordinated reference data management recognized as key tenet for regulatory compliance, operational efficiencies, and potential new revenue generation among financial institutions, new survey finds.
London - A *survey commissioned by global information company Reuters (LSE:RTR, NASDAQ: RTRSY) and designed and conducted by A-Team, a leading research and analysis company focusing on the use of information technology in financial markets, reveals that financial services firms could realise new revenue streams from reference data management investments.
Reuters DataScope, a total solution for historical and reference data needs, commissioned the survey. The results reveal that an overwhelming 81% of respondents believe that savings and efficiencies can be gained from close cooperation between the data management teams in the front-office and those in the middle- and back-offices. Sixty-four percent said that this approach was already part of their data management strategy. Indeed close to 30% of those surveyed have already put a centralized approach to data into place across the enterprise.
The broad survey was conducted to understand attitudes towards data management, information sourcing trends and data consolidation.
It found that straight through processing is no longer the key driver for sorting out reference data issues. Operationally, it is the stricter regulatory requirements such as capital adequacy framework Basel II and Know Your Client, UK anti-money laundering guidelines that have been the main drivers behind reference data automation. And the potentially serious ramifications of non-compliance have forced the reference data issue from the back-office right up to senior management level.
But, while regulations are driving the investment in data management, the more forward-looking institutions are now considering strategies for how to translate this investment into new revenue streams going forward. This throws down a challenge for traditional data vendors to support them in this effort.
Kevin Bradshaw, global head of Reuters DataScope, says: "We are very impressed with the findings of this survey, which play to the fact that Reuters is one of the few market participants that can offer complete front- to back-office data integration. We are committed to supporting these firms in their efforts to centralize their data management efforts, automate reference data, and to realize a return on their investment."
Around 70% of reference data managers surveyed said that budgets would rise next year, as data managers realize the increasing importance of coordinating data management activities between the front-, middle- and back-offices.
Larger financial firms are further ahead in the effort, and 25% of all firms surveyed are spending over $15 million per year on their reference data budgets. Close to 10% are spending between $5 million to $10 million.
*The survey of more than 100 reference data managers in the UK, Europe and the US was conducted by A-Team, a leading research and analysis company focusing on the use of information technology in financial markets, and commissioned by Reuters DataScope. Reuters DataScope is a complete front- to back-office solution for pricing, historical and reference data needs.