Facing Cuts, Data Departments Find 'Best Friend' in Regulation

While regulation may not be at the top of everyone’s wish list this year, embattled data departments may have actually found a friend in post-crisis reform, experts say, as the industry continues to refine its focus on cost-cutting measures.

Carolyn Baker, head of data management and governance at asset manager GAM, said regulation has been a game-changer over the past decade when it comes to data management. Speaking during a panel discussion at the Summit for Asset Management conference, held in London on February 28, she described regulation as a “best friend” when it comes to data costs, pointing to the budgets financial services firms allocate to regulatory costs.

While other data-related costs can get trimmed, the mandatory nature of regulatory programs secures budgets around data, which can be eye-watering at times. “At one of the last companies I worked for, the cost of market data is probably about the third- or fourth-largest item on the company’s balance sheet, which gives you an indication as to how much this stuff actually costs,” she said.

Other panelists said regulation and intelligent data management are two ways for firms to circumvent pressure to reduce data costs, with a key consideration being the approach taken to data management programs.

Marc Rubenfeld, head of sales for EMEA at BNY Mellon’s Eagle Investment Systems, said it wasn’t necessarily about not doing anything when it came to data management. “This idea of, ‘I am not going to do a data management program’—I don’t think a lot of people are saying that,” he said. “I think the challenge today is more of, ‘I haven’t done anything around this for a while and now we are a little bit behind. How do I start to move the needle in a meaningful way?’ And for the projects we work with people on, we try to instill this idea of doing it in an agile manner. Pick a data domain, and let’s move that through the whole process, up to getting it available as a service to you in measurable increments.”

Francis Gross, senior advisor at the European Central Bank, moderated the panel and discussed his involvement in managing data budgets for a number of years at the bank. He said there are generally two ways of pushing down costs: Simply say there will be less budget, or work more intelligently with data.

Eagle’s Rubenfeld added that becoming a data-driven organization should not be seen as a “fad,” drawing comparisons with inventions like electricity, the telephone, and the internet. “It is an evolution of how the business is done on a fundamental level,” he said.