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Increasing volumes and the complexity of reference data in the post-crisis environment have left the middle office struggling to meet the requirements of the current market order. Middle office functions must therefore be robust enough to be able to deal with the spectre of globalisation, an increase in the use of esoteric security types and complex investment strategies, as well as rising transaction volumes. This has led many from the buy side and the sell side to consider outsourcing strategies for some of these functions, offshoring, in-house development or the acquisition of new vendor technology.
It seems that risk management is never far from the minds of the boards of financial institutions at the moment, given the increase in regulatory and client scrutiny of this space in the post-financial crisis environment. In order to meet the slew of regulations on the horizon, firms are being compelled to invest in their risk management systems to keep on top of their exposures, be they credit, market or liquidity related.
This year has truly been a year of change for the data management community. Regulators and industry participants alike have been keenly focused on the importance of data with regards to compliance and risk management considerations. The UK Financial Services Authority’s fining of Barclays for transaction reporting failures as a result of inconsistent underlying reference data is a case in point. Firms are now more aware than ever before of the dangers that are posed by failing to adequately manage this data: reputational and operational risk is at stake.
It may have been a long time coming, but it appears that machine-readable news’ time has come. With today’s emphasis on fast, automated and event-driven markets, the ability to tap events and apply them to computer-based models seems obvious. But until relatively recently, the idea of electronically capturing news–or text-based information–for use in automated processes has been the stuff of science fiction.
