Whether it is ALM, AML, CRM, STP, P&C, SOX or RISK, data is part of the problem or part of the solution across capital markets, banking, and insurance. From asset-liability management to anti-money laundering, business users want to get their hands on the fundamental data so they can analyze it and combine it for actionable views of the business.

Most financial services firms still operate in technology silos, a legacy of departmental solutions, mergers and acquisitions, and days when computers and communications weren't powerful enough to support more comprehensive solutions. The new acronym, in an industry that hardly needs another, is EDM - enterprise data management.

"Financial firms need to know who the client is, information about the client, and the external data relevant to that client or transaction," said Simon Blyth, vice president of sales at TAP Solutions, which helps capital markets firms distribute and manage data. Morgan Stanley is replacing 23 securities masters with a single security service from TAP. For most firms, the three key drivers are reduced costs, improved revenue opportunities and compliance, he added. The order of priorities may shift depending on Elliott Spitzer's latest announcements.

GoldenSource, formerly Financial Technologies International, has found that capital markets clients are beginning to understand the importance of enterprise data management, said Mike Meriton, the company's CEO. About a year ago companies began sending RFPs for a security master, quite a change from the days when sales people had to persuade a firm that 20 or more security masters was not a great idea. But with nearly half of failed trades attributable to poor reference data, firms trying to drive up their straight-through processing rates are paying attention.

"Half a dozen global financial institutions have now gone through a re-organization and have created enterprise data management teams, often at the group level," added Meriton. "They realize that if they are really going to attack this issue there is a political reality - they can't do it in a single line of business or a single geography. It has to be a shared service."

Whether it is measuring return on capital from locations around the world, guarding against money laundering, providing auditable results for Sarbanes-Oxley, or managing risk, firms need data to comply.

Further Reading:
One of the most intriguing thinkers about data management is John Fleming, managing director at Morgan Stanley. He is practical - working with the company's data providers to improve quality - and demanding. "Everything I've learned about vendor management I've learned from Wal-Mart," he said at a recent New York symposium. He also has a large, far-reaching vision of where this can go. For my interview with him see:
http://www.windowsfs.com/articles.asp?id=441

The January 2005 issue of Data Reference Review caught Fleming at a New York symposium co-sponsored by Risk Waters and Microsoft. You can find the article on TAP's Web site:
http://www.tapsolutions.com.

GoldenSource has white papers at http://www.ftintl.com/GS%20whitepapers.cfm

For a perspective on the insurance industry's drive for data standardization, see the cover story in the upcoming spring issue of Windows In Financial Services.
Subscribe free at http://www.windowsfs.com/financialsubscription.asp

Tom Groenfeldt
Editor
Windows in Financial Services
tom@windowsfs.com