This week Lisa Conner, Head of Data Management at BISAM, and I discuss the importance of enterprise-wide agreement on data governance and management, and the importance of transparency across all data sources.
EA: Many of our BISAM Insights blog readers will remember your informative (and witty!) “What We Don’t Think About When We Think About Data” series. The key point that resonated with me throughout all of your posts was the leading role of data when it comes to all the ways in which portfolio analytics software should empower practitioners to measure and analyze performance and risk. As you put it at the time, “it all starts with the data.”
LC: Absolutely, and as I’ve previously written, I’m not talking about the simplicity of “data in/data out.” As a matter of fact, I’d take my statement one step further to say it actually all starts with data governance. There are so many compliance and regulatory requirements informing firms’ data governance, that if you don’t have an agreed upon governance across the enterprise with regard to what the data inputs should be and how that data is defined, then the accuracy of your outputs is completely compromised. Take something as simple as closing price, for example. One size does not fit all when it comes to exchange close data. How does your particular firm define exchange close data? Last trade? Asking/close price? You see, it’s rarely a simple definition and therefore consistency in data sourcing matters and your definition of a particular data set must be abided by across the enterprise for consistency. In other words, if there are discrepancies and differences in the data that the front, middle and back offices use across systems, then there will be discrepancies and a lack of confidence in the output.
EA: Can you expand a bit more re: the compliance and regulatory requirements that inform firms’ data governance today? Also, to our readers, I recommend a visit to the Regulatory & Compliance section on Data Management Review for a deeper dive: http://datamanagementreview.com/regulation-and-compliance
LC: So there are all sorts of rules and regulations that require a firm’s investment book of records to be on par with its data warehouse. For example, with IOSCO in mind, the inputs that firms use to drive their performance, attribution and risk analytics has to be the same as the settled transactions coming out of their Investment Book of Record (IBOR). If you don’t own that data, and are relying on your software vendor for oversight of integrated data, then your compliance with IOSCO could be called into question. The only way you get confidence is to a) use your own data sources, and b) ensure you have transparency to data inputs and can identify discrepancies to modify accordingly.
EA: I imagine that poses a challenge for firms when it comes to external solutions and reliance on products/software that mandate an integrated data set. It leaves room for bias by anyone’s external definitions vs. their firm’s internal, agreed upon definitions. Pardon the shameless plug, but I hear from BISAM’s B-One and Cognity customers and prospective customers that our “data-agnosticism” is actually a value-add.
LC: Yes. BISAM is data-agnostic. We don’t have an inflexible integrated data set and therefore we can abide by our customers’ proprietary rules and regulations when it comes to their data requirements. We are not forcing you to adhere to a particular data set or data vendor. We can follow and be respectful of our customers’ data decisions and data governance by enabling them to use their own data (with all the correct permissions from their own providers, of course!). And our data management tools for both B-One and Cognity allow firms the transparency they need to ensure the accuracy of their data going in, thereby ensuring the accuracy of the performance and risk analytics coming out.
EA: Right, because what good is a data source - integrated or not - if there’s no transparency?
LC: Yes. So data aggregators do their part to support the maintenance/continuity of data, and BISAM complements that with strong data management capabilities - a differentiator for us. This is a particular value add for our Cognity Market Risk platform compared to other providers with inflexible integrated data services. Cognity brings its own data views and analysis – our customers bring their own data with their own governance and leverage our systems’ validation steps for the data inputs and visibility into the results so that customers can isolate any data issues and go back to make changes at the source and regenerate. They are able to do this expediently without the bottleneck of 3rd party support tickets and data check steps.
EA: Because it is their data that they own end to end.
To read past discussions with, and blog posts from Lisa, visit: http://blog.bisam.com/author/lisa-conner-head-of-data-management-bisam