Over a third of UK-based asset managers and banks are not confident in the quality of reference data they use to support trading activity, according to a survey from IT services firm Patni.
The survey of 100 company representatives found that 91% of asset managers do not have a single supplier of reference data, with the remainder admitting that they were not sure of their source at all. Respondents say that an average of six per cent of trades fail as a result of poor reference data.
Yet just half of those questioned say they have not considered outsourcing the management of their reference data to a third party, due to fears of a potential loss of control and security breaches. Meanwhile, the overwhelming reason cited for considering outsourcing is the potential for cost savings, followed by higher levels of accuracy.
Philip Filleul, product manager, reference data, Patni, says: "Many buy-side and sell-side firms are now uncomfortably aware of both the time and costs they devote to purchasing, cleansing and distributing reference data, as well as the risks that arise when these tasks are not performed effectively, among them failed trades and lost revenue opportunities."