Banks pushing reference data boundaries

Banks pushing reference data boundaries

Almost three in four financial institutions are looking to raise levels of reference data automation over the coming year as part of a concerted industry-wide effort to improve data quality, cut costs, and reduce risks, according to a global survey conducted by AIM Software and the Vienna University of Economics and sponsored by Reuters.

The research surveyed 1000+ banks from 88 countries and found that, on a global perspective, 72% of firms plan to increase automation of reference data management compared to 64% last year.

The geographical areas where most banks reported plans to improve automation of financial data were the Middle East and Africa (89%) and the Commonwealth of Independent States (72%).

Martin Buchberger, head of marketing at AIM Software, says the focus of banks' efforts stilll lies in the automation of reference data and corporate actions processing, the areas from which the largest costs originate.

On a global perspective, 44% of the respondents plan to increase the degree of automation for reference data, compared to 29%, while 45% of respondents plan to increase the level of automation for corporate actions, up from 29% in the 2004 survey. The 2005 survey found that 40% of companies also plan to increase automation of pricing data, up from just 24% last year.

Buchberger says the results also show that companies see the close connection between reference data management and efficient risk management.

According to the survey risk management (56%) and the reduction of errors (52%) are the main driving forces for the automation of reference data. Other essential issues are the reduction of costs (49%) and the Basel II Capital Accord (40%).

The research shows that the predominance of proprietary data management solutions has reduced significantly and, although in 2005 36% of companies still rely on proprietary development, 45% of the interviewed companies prefer to buy or extend a system. AIM says this trend may be due to the wider range of standardised data and risk management systems now available.

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