Reference Data Management: Unlocking Operational Efficiencies

Reference data management (RDM) has received increasing attention since the market dislocations of the recent past and from the regulatory onslaught that has grown in its wake. Efforts to design and develop a global legal entity identifier (LEI) have proven effective in enhancing the wattage of this spotlight on RDM, leading one to believe that this crescendo is somehow correlated to specific catalytic events.

While the default of Lehman Brothers, or even the calls for heightened international transparency in the aftermath of 9/11 via new anti money laundering (AML) and know-your-client (KYC) rules for example, could be credited as catalysts for the need to improve RDM solution functionality, we believe that it is more accurate to think of these events as tipping points from one generation of RDM solution to the next.

The heart of the matter is that RDM solutions have been growing, improving and maturing in functionality in lockstep with the evolving operational complexity of most capital markets firms, but especially at the Tier 1 banks. As the demands from downstream applications grow - involving everything from improved risk measurement, regulatory reporting, compliance, or even new strategy innovation or the enhancement of general operating efficiencies – the burdens of heightened functionality fall in large part on the systems that manage reference data. Reference data is the glue that binds disparate datasets together, and allows for much more granular cross-referencing of data across an increasingly disparate spectrum of sources.

Based on recent outreach, TABB Group has concluded that this market is in the midst of transitioning to a 4th generation of RDM solutions; one that begins to position RDM as a central component in a much more comprehensive enterprise data management (EDM) framework and which focuses more rigorously on a data lifecycle management process. A discussion of how Tier 1 players navigate from the solutions they have now to the solutions that they actually need now is among the primary themes of this report.

TABB Group Vision Note Reference Data Management: Unlocking Operational Efficiencies

This 22-page, 11-exhibit vision note presents the generational evolution and tipping points of reference data management (RDM) solutions in parallel with the evolution of operational complexity in Tier 1 capital markets firms, among a growing list of others. Based on outreach to over 20 reference data managers, IT architecture personnel, and RDM solution executives, TABB Group has concluded that the industry is currently transitioning to a fourth generation of RDM solutions. This report explores unique attributes of RDM solutions necessary to deliver the required performance levels in the current environment, why it is critical to allocate resources to improved RDM, and what various types of firms may need to do to get in line with this vision.