Capital markets facing reference data challenges

Capital markets facing reference data challenges

More than two thirds of capital markets firms say that data quality is hitting costs and driving them to look into replacing siloed data management systems, according to a survey from Accenture and Greenwich Associates.

The poll of 133 buy- and sell-side executives, shows that 70% rank data quality as a top issue affecting their trading infrastructure and nearly half find it difficult to deliver answers to these challenges.

Owen Jelf, global MD, capital markets, Accenture, says: "Though capital-markets institutions spend more than $6 billion a year on reference data, the industry continues to operate on legacy systems that often don’t align, and data comes from multiple sources, in disparate formats that require continuous data cleansing and reconciliation.

"Firms would benefit from focused end-to-end multiple year investment in developing ways to make meaningful, holistic changes to fix this problem."

Respondents also cite the growing regulatory burden as a major issue, driving up costs. Nearly half say they are struggling to meet regulatory requirements, yet only slightly more than one-third have a formal regulatory change programme in place or have a standardised approach to dealing with the imposition of new rules.

When asked to cite internal and external factors affecting costs, more than one-third of respondents say they expect to see an increase in operating costs over the next year and 37% predict higher IT costs. The study also found that, on average, data licensing continues to make up 33% of capital-markets firms’ overall spend.

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