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AIM Software, a leading provider of centralized reference data management software to the financial industry, has announced the results of its Global Reference Data Survey conducted for the sixth consecutive year. The study was designed to inquire into the driving forces, challenges and planned investments for reference data automation. This year’s survey was sponsored by Interactive Data (Europe) Ltd, part of Interactive Data Corporation (NYSE: IDC).
From April to November 2009, AIM Software (www.aimsoftware.com) carried out its Global Reference Data Survey in 51 countries. The global findings 2009 show that high-quality reference data is more than ever being considered a key issue for financial institutions in order to reduce errors (73% of all responses), cut costs (58%) and to help understand a firm’s exposure to risk (58%). Compared to the results of previous years, these figures indicate a steady increase of enterprises’ awareness in this field: in 2006 only 53% of all participants perceived errors, costs (45%) and risk management (44%) to be major driving forces for reference data automation.
A major finding of this year’s survey reveals that the demand for a centrally managed security master is still growing, especially in Western Europe and North America. Whereas in 2007 only 38% of all respondents stated that they had a golden copy, in 2009 51% already feed reference data into a centrally managed repository. “Despite the cost containment policy in many institutions following the economic crisis, firms are aware of their need to enhance operational efficiency and to support the growing risk management and compliance requirements. This might be the reason for the steadily rising demand for central security master files,” explains Martin Buchberger, Head of Marketing and Sales at AIM Software.
For financial enterprises the focus of reference data management lies on the management of basic data (61%), the automated opening of instruments (48%) and the management of pricing data (48%). However, the management of corporate actions is gaining importance as firms are recognizing the need for the efficient processing of corporate actions data in a timely and reliable manner: more than a third of all participating institutions state that they want to invest in the automation of corporate actions. “New types of corporate actions continue to emerge, covering an array of instruments that have grown in complexity. Besides this growing complexity, the volume of corporate actions data is expected to further rise in the future due to an increase in corporate refinancing and restructuring, and back-office teams will be sorely pressed to keep it under control,” states Paul Kennedy, European business manager for reference data at Interactive Data.“Recent market events have highlighted the need to have a greater understanding of how a corporate action can affect a firm’s risk profile.”
When questioned about difficulties with reference data from financial data feeds, half of the firms indicate that they are struggling with high costs, soaring from 28% in 2006. Other issues are poor data quality, missing standards and bad data coverage. Only 14% do not perceive any problems at all.
The survey results show that in the aftermath of the economic meltdown, enterprises are taking urgent measures to enhance their reference data management solution: a third of all respondents are currently working on this and 18% state that they have already implemented a reference data management suite.
“A special objective of the study is to take a close look at reference data management procedures and observe developments over the years in order to help institutions to get a better picture of their business in a constantly changing environment. By comparing their own data management strategy with the regional or global results, enterprises will be able to assess their future steps in reference data management,” concludes Buchberger.
