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Tele-Depths / Surveys News 2/14/12

Poor reference data management causing headaches in financial sector

 

About 62% of financial institutions plan to “extend or customize” their reference data management strategies over the next two years, a new survey has found.

The survey of 107 reference data professionals from banks and financial services companies around the globe revealed that financial organizations planning to update reference data management strategies are doing so primarily to improve overall enterprise data quality and reduce risk of exposure to new and changing regulatory compliance mandates.

The survey, which was conducted by IT outsourcing and reference data management provider iGATE Patni in conjunction with Inside Reference Data magazine, also found that to a lesser extent, organizations are planning to update reference data strategies to improve operational efficiency and increase customer satisfaction levels.

Reference data is most often described as information that is used by an application, but does not originate within that application. For example, reference data could be data that is purchased from an external source and fed into on-premises systems—such as real-time stock market transaction data. Reference data might also be a product master list that a customer relationship management application refers to as it completes a function.

Survey respondents said one of the biggest obstacles to successful reference data management is making the most of budgets. Many spend too much money acquiring reference data and not enough money maintaining its quality, consistency and usability over time, according to Fred Cohen, group vice president and global head of the capital markets and investment banking practice at iGATE Patni.

Cohen said that “siloed” reference data management practices—where multiple departments within large organizations can end up purchasing the same information repeatedly—is another example of money being wasted.

“It’s just very inefficient,” Cohen said. “We’ve met companies that are spending $200 million-plus a year buying reference data and they’re wasting about 25% of it.”

 

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