Ref Data Collaboration "Needs to Move from Discussion to Action"

LONDON - Lack of data standardization remains a challenge for market participants, but consumers now want to take action and make a difference, according to a panel of speakers at the Third Annual Reference Data Management in the Banking Industry conference in London in February.

To ensure the discussion moves from talk to action, collaboration is essential, said speakers. Data experts at the event agreed no more time should be spent discussing the challenges, as these have typically been assessed for years.

London-based PJ Di Giammarino, chief executive at think-tank JWG and chair of the event, said everyone is in the same boat, and there is now a need for a defined scope and set of outputs for the community. "The data community remains very insular," said Di Giammarino, adding that there is a need to open up and involve everyone in the industry in data debates.

For too long the focus has been on solving standardization challenges internally, but this approach has not facilitated a long-term solution to the industry. London-based Julia Sutton, head of customer data at RBC Capital Markets, said all those involved in data have a part to play, and some have already started to collaborate. "Certain players and banks are already sharing their data, collaborating on what that data should look like," said Sutton.

The possibility of seeing a group of expert data practitioners push for change is also being discussed in other forums. RBC's Sutton, who is a member of Washington, DC-based industry groups FISD and the EDM Council, and works alongside JWG in its Customer Data Management Group (CDMG), said data standardization must remain on the agenda. "We have to make a decision to take action and perhaps decide to spend two hours on this effort every week. We have to change our mindset and stop saying we can't," said Sutton.

Paris-based Olivier Rose, head of projects and international data management, Societe Generale, said now could be the right time to push ongoing debates forward.

But with tight work schedules, other panelists questioned if ideas such as a central action group could succeed. London-based David Thomas, vice-president, Barclays Capital, said if a separate council took the lead it would be a good option. The time needed to fix the problem could represent a barrier for those with full-time jobs, he said.

The Utility Route

The utility approach is one way to create a common data infrastructure, and this proposition has been championed by Frankfurt-based Francis Gross, head of the external statistics division at the European Central Bank.

At the conference, he said the business case for the utility needs to be built with all the stakeholders as no solution will be accepted by all if it fails to serve all. "Whether we are central bankers, regulators, other authorities or the industry, we all handle the same monster, so we need a comprehensive register and a simple infrastructure," he said.

In fact, discussions about the reference data utility proposed by the European Central Bank are at the heart of the debate. Llew Nagle, head of data quality at Barclays Capital, said centralization will follow standardization. "The utility has a place in this, but not before we put in place our industry standards," he added.

Thomas said simplicity is essential as the problems all parties face internally may still continue to be problems within a centralized solution. "It would have to be at a very basic level, something that benefits everyone but is so simple almost that it can't go wrong," he said.

Yet, this is also what has been echoed in recent updates on the utility approach. ECB's Gross said a simple start is necessary for the reference data utility to succeed, and the thin utility framework being developed by the ECB will start at a small scale.

"The framework would offer two registers, one of entities and one of instruments, which would be built on the unique instrument identifier. There would be no need to look far beyond the ISIN for this," he said, adding that he fully agrees the standard should be designed by the industry.

It was also suggested that both the registers should begin with a reasonable scope, focusing on the fact that it should address simple data fields. "It could then develop and potentially grow by demand," said Gross.