White Paper Seeks to Enhance Financial Markets Data Exchange
Posted by Colin Lambert. Last updated: January 19, 2023
A new white paper from the Depository Trust & Clearing Corporation (DTCC) highlights a path to improve data exchange and data management amongst financial markets participants.
The paper Data Strategy and Management in Financial Markets, details four hypotheses to facilitate the change; making data more accessible and secure; connecting data systems, increased capacity to focus on data insights; and “open source” data standards.
The paper says data users will have increased flexibility in determining how and what data is received at desired times. To enable this, data governance, privacy and security will need to be prioritised. Secondly, industry participants will free their own data from legacy systems and be able to pool it into data ecosystems and connect those ecosystems to others. This will reduce duplication of data across the industry and allow for the co-development of innovative data insights, DTCC says.
More efficient data management, cloud enabled capabilities, and further automation of routine data management tasks will free up capacity and accelerate time to market for new product development, reducing the need for specialised data analysts and data operations teams to focus on deriving insights from vast stores of data.
Lastly, the paper anticipates that the industry will continue to adopt more standards around data models, with the most viable use cases being reference and transaction reporting data. This will result in increased operational efficiency and better data quality.
To enable these changes, the paper suggests institutions that produce and consume significant amounts of data embed key principles into their data operating models. These include; establishing robust foundational data management capabilities, including having a thorough understanding and catalogue of data, breaking down data silos and implementing robust data quality practices; supporting strong data governance, including the right set of data privacy and security standards to enable data collaboration with partners; and exploring where there is mutual benefit from collaborative data environments across firms and the industry to advance interoperability.
“As new technological advancements, including broad adoption of cloud technology, spark an evolution of global markets, the financial services industry has an opportunity to reimagine how data is exchanged and managed across financial markets and firms,” says Kapil Bansal, head of business architecture, data strategy and analytics at DTCC. “For many years, companies have collected massive stores of data, but the siloed nature of data and the need for better data quality limited the ability of market participants to extract strategic insights to support more effective decision-making. We’re now at a unique moment where we can make this vision a reality, but long-term success hinges on market participants taking action to ensure their data strategy can meet the demands of a highly digitalised and interconnected marketplace.
“Building the future of data exchange and management will require close consultation and coordination among industry participants and service providers, including standardisation in how data is managed and shared,” he adds.