In keeping with the recent onslaught of regulatory papers aimed at fostering a more risk aware financial services industry, the Basel Committee on Banking Supervision (BCBS) has published yet another consultative paper this week, this time focused on corporate governance. The paper includes 14 principles aimed at sparking investment by firms into their risk infrastructures and a more responsible attitude to risk management, a key part of which is having access to the right data at the right time.
The recently published examiner report into the Lehman bankruptcy indicates the scale of the data challenge faced when winding down a financial institution of its scale: the examiner was faced with three perabytes (otherwise known as 350 billion pages) of electronically stored data to process. Unsurprisingly, given the fact that information needed to be presented before the end of the next century, the examiner was only able to collect and process five million of these documents (around 40,000,000 pages, or 0.01% of the total number of pages). This challenge was further exacerbated by the storage of this data on “arcane, outdated or non-standard" systems, said the report by Anton Valukas of Jenner & Block.
In order to assist the European financial services community in its attempts to improve liquidity risk management, the Committee of European Banking Supervisors (CEBS) has published a new consultation paper on how to go about producing an effective allocation mechanism for liquidity costs, benefits and risks, CP36. The recommendations are aimed at providing firms with a framework upon which to build internal pricing mechanisms to price liquidity risk and to align liquidity risk management culture across their organisation via suitable incentives, which are likely to include significant data gathering and technology requirements.
The focus of data management projects may change along with the questions around achieving business buy in, but the answers about the benefits and practical considerations remain the same, says Danielle Newland, product manager of data management solutions at Eagle Investment Systems. What has changed, however, is the level of interest around outsourcing and application service provider (ASP) solutions in the current market. According to Newland, 50% of the vendor’s pipeline is coming from the ASP side of the business; thus backing up the predictions made by her colleague John Lehner last year (see 
Following the appointment of Geoff Harries as the new global head of asset servicing for its Investment Management Solutions (IMS) business earlier this month (see 
The regulatory scrutiny of data quality is driving firms to join in with the second wave of outsourcing that is sweeping the market, according to Colin Close, CEO of hosted data management solution vendor Netik. Close reckons that firms should not wait for standards to be set, either by the regulator or bodies such as the EDM Council, before tackling their data management challenges and that a new level of pragmatism is evident in the market.
A-Team Insight Exchange is a new event series for 2010, which will combine A-Team’s expertise in financial markets IT with thought leadership from world-class technology innovators and practical experience from financial market practitioners.
Last month, the International Organisation of Securities Commissions’ (IOSCO) Technical Committee published the details of the new agreed template for the global collection of hedge fund data in order to better manage systemic risk. These new data requirements are aimed at bringing a new level of transparency to the traditionally opaque sector but will, in effect, mean that these funds will be forced to invest in data systems similar to their more conservative buy side counterparts.
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