Asset Control unveiled ACDEX, a new outsourced service that manages the quality, integrity and distribution of securities related data. For financial institutions and corporations that use securities data in trading operations, risk management, and portfolio management, ACDEX operates as a centralized data management utility that cuts the costs and risk associated with decentralized, in-house management of data from multiple sources.
The first ACDEX customers are scheduled to go live in Q3 2002. Initially, ACDEX services focus on management of securities reference data. This data describes securities in terms such as issuing firm, country of origin, type of security and terms of investment or payment.
“Everyone who works in capital markets understands the costs and risks associated with decentralized management of reference data. Until ACDEX, the only viable solution was to make substantial investments in powerful, in-house data management infrastructures, such as the Asset Control integration platform,” said Ger Rosenkamp, CEO of Asset Control. “ACDEX offers the option of outsourcing both the R&D and daily overhead of securities data management. And possibly more important, it offers the industry a cost-effective vehicle for creating consistency among institutions.”
The Rationale for ACDEX
Reference data is obtained from multiple data vendors and internal sources. Multi-sourced data must be aggregated and cleansed. Many institutions maintain redundant systems that gather and maintain data in separate repositories. Data discrepancies among systems and institutions cause trade failures and breaches in straight-through processing (STP).
This issue gains visibility as the financial industry moves toward the planned next-day trade-settlement (T+1) standard in 2005, instead of the current T+3. The “T+1 Business Case” report, prepared by CapCo and Accenture for the SIA, identified standardization of reference data as an essential milestone in meeting STP and T+1 objectives. A more recent study by the Tower Group identified reference data problems as a leading
cause of trade failures.
Since all parties in trading and asset management depend on the same types of data and often the same data points, reference data management is a commodity process. Commodity processes lend themselves to outsourcing.
“In achieving STP/T+1 objectives, companies that want to focus on their core competencies, such as customer relationship management or product development, will turn the non-core, non-value-added processing component of their businesses to trusted outside firms,” says Patricia Tsien, Accenture Partner in Global STP Practice. “The ACDEX concept is an example. It addresses a critical industry need for a common reference data platform, leveraging Asset Control’s track record in securities data modeling and management.”