While regulators and industry participants agree that there are significant ways in which data can be better utilized, the landscape is unclear in terms of finding effective way to standardize data to make it readily available for all.
“We’re in the gangly teenage years of standards development,” said Michael Atkin, managing director of the EDM Council, at the TSAM conference in Brooklyn, New York.
One front of the data challenge lies in establishing a common identifier, such as the Legal Entity Identifier (LEI). But “an identifier by itself is of little value. An identifier as a building block is of significant value,” Atkin said at another conference this week, SIFMA Tech in midtown Manhattan.
Atkin and the EDM Council are working on developing the Financial Industry Business Ontology (FIBO), which is an initiative to define financial industry terms, definitions and synonyms using semantic technology to provide transparency in the global financial system. The financial industry, says Atkin, is one of the last information-intense communities to adopt underlying semantic technologies, which help computers better understand human vocabulary. The first step, he said, is getting market participants to adopt the infrastructure and then build the applications on top of that. For example, GoldenSource’s enterprise data management platform is mapped to the FIBO standard, enabling clients to access, analyze, and produce output consistent with FIBO standards.
Panelists at SIFMA Tech agreed that the opportunity to manage data better looms large, and while the current state may be not be up to speed, the industry is making progress. Peter Serenita, chief data officer at HSBC, said at SIFMA Tech that the growth of data employees such as CDOs at organizations is a clear indication of need, and the industry is on its way to solving the data challenge one way or another.
Some organizations may face the challenge of justifying spending on new technology now when the current systems may work fine. However, Ken Lamar, senior vice president at the Federal Reserve Bank of New York, said at TSAM that the tide is changing in the sense that firms need to invest in infrastructure now while projecting what will be asked of them one-to-three years from now, so that when regulators require data quickly, these firms will be ready to do so.
Lastly, Linda Powell, CDO at the U.S. Treasury’s Office of Financial Research (OFR), also speaking at TSAM, noted that data should be open and available to the public, but in order to create true transparency instead of just noise, there needs to be well-defined, normalized data.
Industry In 'Gangly Teenage Years' of Data Standards Development
While regulators and industry participants agree that there are significant ways in which data can be better utilized, the landscape is unclear in terms of finding effective way to standardize data to make it readily available for all.
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