Independent research firm Lepus, in partnership with Thomson Reuters, released the results of a survey highlighting the responsibility fragmented IT systems played in the financial crisis and the role data will play as the market rebuilds.
The survey of data management strategies at more than 100 top tier buy- and sell-side firms revealed how more than three quarters (77%) of participants intend to increase spending on projects that address data quality and consistency issues.
Firms are increasingly looking to exploit data consistency to support data hungry risk management processes and achieve a more extensive view of risk, with an overwhelming majority (87%) citing improvements in this area as a priority, according to the results.
The need for clarity of data to facilitate compliance is a key focus for 44% of survey participants, likely driven by the need for data intensive stress tests as firms look to improve scenario modeling for low probability, high impact events following largely unpredicted volatility across financial markets in recent years.
Portfolio management, regulatory compliance, trading, finance, clearing and client profitability were all highlighted as areas that would benefit from an improved data infrastructure, according to the executives who took part in the survey.
“A huge majority of firms have looked to revise their data management solutions in the wake of the credit crisis,” said Robert Smith, head of research at Lepus. “The results of this survey show that firms are committed to improving data quality and consistency across the organization and are investing significantly in a bid to move closer to their ideal data management solution.”
Jason du Preez, global business manager of Enterprise Platform for Data Management at Thomson Reuters, noted that as the economy recovers, financial institutions are looking to improve and simplify data operations by demanding greater consistency and quality of data across the front, middle and back-office.
“Through this survey, the industry has outlined the importance of next-generation data management solutions to support effective risk, regulatory compliance and trading strategies," he said.
This story has been reprinted with permission from Securities Industry News.
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