AIM Software’s Global Reference Data Survey 2008: Tendency towards Golden Copy Solution to manage Reference Data

14 January 2009

AIM Software, a leading provider of centralized reference data management software to the financial industry, has announced the results of its Global Reference Data Survey conducted for the fifth consecutive time in 2008. The study was designed to inquire into the driving forces, challenges and planned investments for reference data automation. It was sponsored by Interactive Data (Europe) Ltd, part of Interactive Data Corporation (NYSE: IDC), and a leading global provider of financial market data, analytics and related services to financial institutions, active traders and individual investors.

From May to December 2008, AIM Software received approximately 340 answers from financial institutions in 58 countries. The global findings of 2008 reveal that improving reference data quality is considered more than ever a key issue for financial institutions in order to help reduce errors (stated by 70% of respondents) and costs (53%). Risk management was named as another driving force for implementing a reference data management solution by 53% of the surveyed companies.

The main problems financial institutions face when it comes to data from feeds are missing standards (43%), poor data quality (43%) and bad data coverage (39%), as well as high costs (38%). The fact that participants last year named the same difficulties shows that there is still some effort required to improve the data provided by feeds. A major finding of the 2008 survey reveals that more and more companies start to see the advantages of using a centrally managed database, especially in Western Europe, North America and Asia & Asia‐Pacific. While in 2007 only 38% of the worldwide respondents said that they had a golden copy, in 2008 already 43% use reference data for this purpose. In North America this number goes up to 53%, while in Asia even 60% of respondents declared that they are feeding data into a golden copy. “The year before, financial institutions knew that they had to increase automation but they didn’t have a clear agenda yet. Now they are looking at the bigger infrastructure and focus more on the core back office applications, which may be a reason for the push towards the golden copy,” said Martin Buchberger, Head of Marketing at AIM Software.

The focus of reference data management lies in the management of basic data (62%) as well as the management of price data (48%) and corporate actions (40%), the areas from which the largest costs originate. 28 % of respondents plan to increase their levels of automation for corporate actions, the least automated and therefore one of the most labour‐intensive, error‐ and risk‐prone area.

Although many companies still rely on proprietary reference data management solutions (41%), a large proportion of the surveyed companies consider it important to either buy a reference data management solution, outsource its development or the processing (55% in total). This result underlines that this area is no longer regarded as an internal core competency of an institution's IT department. One reason for this trend might be the wider range of standardised data and risk management solutions now available on the market, and that more and more market players are rethinking their data sourcing infrastructures.

“A special objective of our survey was to take a closer look at reference data management procedures in order to help institutions to get a better picture of their business in a constantly changing environment. By comparing their own data management strategy with the regional or global results, they will be better able to evaluate their next steps,” concludes Buchberger.

Bob Cumberbatch, Business Lines Director, Interactive Data (Europe), adds: “We are delighted to once again sponsor AIM Software’s annual Global Reference Data Survey. With the volatility of the financial markets, it has become increasingly important for institutions to prioritise reference data management. High‐quality reference data can help firms better understand their investments and therefore more effectively manage their risk. ”

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development