Thursday, September 29, 2011

Improving efficiencies among key challenges and opportunities in enhancing Market Data Management

Ajay Kotkar, CEO Asia Pacific and Global BFSI head, Omnitech Services, offers guidance on selecting an appropriate data management solution.

Success in the financial services industry has always hinged on the ability to access  high-quality market data and distribute it in relevant formats to decision-makers, in a timely and cost effective manner. Simplistic, as it may sound, for most organizations relying on market data feeds for their business, this is a never-ending mission. In addition, the credit crisis of 2008 further amplified the need in capital market organizations to better manage their market data, both for de-risking investment portfolios and for regulatory compliance. Although historically, organizations addressed data management issues as and when they became pertinent; today, the business case to outsource data management services is stronger than ever before. If implemented well, integrated market data management services can reduce errors, mitigate risks, improve efficiencies, lower operational costs and return strategic business benefits in the long run.


Although, there are several technology providers whose solutions address specific issues in data management, no one solution fits all aspects of a business. CXOs will do well to treat data management as a master business programme that integrates several non technological aspects of the business as well, such as culture, regulations, communications, governance, etc. Adopting a long-term, integrated approach to effective data management can help the organization build sustainable strategic differentiators.

The securities market is growing more and more global, with several organizations now serving varied markets. This has resulted in greater complexity in aggregating data and ensuring that it is delivered in relevant formats to diverse users across the organization and across countries. CXOs need to drive their data management programmes in a way that addresses this disparity and complexity. Decisions about whether data should be centralized with decentralized access or the view of the data should be centralized with distributed data, is really a case of entitlements and diversity of user groups within the organization. CXOs usually find their organization’s structure  working against them when it comes to this decision; and get torn between disparate data needs of different user groups and creating a single enterprise view. The key is in ensuring that there is a central governance team, with representations from all user groups, that collectively defines how data needs to be aggregated, stored and retrieved.

The long-term value of data lies in its analytics, beyond real time decisions taken on live feeds. A data management programme, integrated with a good analytics engine, improves risk assessment, demonstrates compliance and increases success rates. CXOs need to build a comprehensive and robust analytics system into their data management programme.

CXOs of financial services organizations need to look at partnering with providers who can bring a holistic approach to data management, encompassing people, business process and technology innovation. The partner should be able to advise the organization and implement a solution that covers the entire gamut of market data management – sourcing the data from multiple sources, creating the data architecture and standardizing it, storing the data securely, provisioning for entitlements, enabling quick and easy retrieval and distribution, and data analytics. The partner should bring in real domain expertise of the banking and financial services industry to ensure that the initiative ultimately serves pertinent business needs effectively; while implementing best practices and efficient processes to help control costs. Only when these aspects are well appointed into an effective data management programme, organizations can create and sustain competitive advantage.

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