Data Management

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The Evolving Role of the CDO

John Bottega, who has been chief data officer at Citi, the Federal Reserve Bank of New York and now Bank of America, says the role of data in the enterprise is increasing.

WS&T: Traditionally, EDM has been focused on setting standards around specific types of structured data. Today, more and more unstructured data is being used. How is unstructured data changing the way you approach managing data?

Bottega: It’s not changing the role; it’s evolving the role. When you think of the responsibility of managing the information in the enterprise, usually the first focus is around the structured data—your database capacity, reference data, analytics. What’s evolving is that there is an awareness that unstructured data is as important to a firm as the structured data. The strategies and methods around archiving, retention and access—they touch on both structured and unstructured data, but it’s important for a firm to have access to both structured and unstructured data as quickly as possible. As the role of data management matures, the scope of it is expanding. If you go back five or six years, I don’t think there was the absence of unstructured data, but it wasn’t a large focus at the time. Today, a mature and holistic approach to data management includes both structured and unstructured data.

WS&T: Which is more difficult, managing unstructured or structured data?

Bottega: Each one has its own unique characteristics. We’re more mature on the structured data side because we’ve been doing database design for two or three decades. Unstructured data hasn’t been a focus for as long, so there are challenges around that. However, they share the challenge of the governance of the data, and the policies and standards that are applied to the data, so that’s consistent across all types of data.

As the role of data management becomes more of a process in the firm, the business units now have a place to go with questions about data. All data is important, but now there’s a place where business units can go to get their questions answered.

WS&T: As you know, big data is the hot and trendy topic today. Is it for real? Is big data technology changing your approach to the way you manage data at BofA?

Bottega: It’s definitely trendy, but I don’t want to speak to the trendiness of big data. I would rather focus on what big data actually is and how you use it to manage large amounts of data and get value. Technology is really advancing in this space, and this is great news. There are many new products on the market that are helping to drill down and find value in the data. But if you step back for a second, large data repositories are important now because we recognize there’s value in very granular data. In the past, perhaps, we were looking at things at an aggregate level. Now we can drill down and look for patterns in granular data, and that’s becoming very valuable to firms, both offensively and defensively.

Defensively, so firms can look for anomalies in financial activities and drill down to transactions. The work that’s being done on these large databases that allows for very specific granularity is important for the health and wellness of the industry. On the offensive side, certainly big data allows you to find patterns in how customers buy and sell or make decisions.

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From a technology perspective, you’ve seen large volumes of data managed effectively in the social space, such as Face­book and Google. They’ve been doing a good job managing the data, and that’s now becoming a part of the financial industry. Taking all of the trendiness away from it, as banks gather more information about activities, having the ability to drill down into the data is more important. And the technology is available to manage the data.

The opportunity that quants and data scientists are creating—the ability to look for opportunities by analyzing data—most often starts in the business units. In other words, the business units ask for the capability to analyze the data, and technology provides the solution.

WS&T: How is big data being used now in financial ser­vices?

Bottega: Big data is definitely being used to analyze market risk, as well as being used to analyze new business opportunities. That’s consistent across the industry.

WS&T: What new business trends or opportunities will change the way firms do business?

Bottega: The regulations put forth by Dodd-Frank have very significant data implications. As I mentioned, it’s about more granular data and specific data to how the markets move. As far as new technologies, you’re seeing big data and more advancements will continue. The market, in both business and technology, is realizing how important data is to their operations, and that’s a good thing for our industry.

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio

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User Rank: Apprentice
10/25/2012 | 7:20:51 PM
re: The Evolving Role of the CDO
I think that John would agree that there is nothing new about data being important; what has changed is 1. regulatory requirements, and 2. companies finally realizing that effective consolidation and analysis of their data has all sorts of benefits.

Going back to the early to mid 1990's, I was working as a programmer and DBA in the US operation of a foreign bank.- Our data was 'locked' in the files of a 20 year old banking system that was very poorly documented, and you needed a programmer who personally knew the file structure to get any data out of them.- Simple inquiries as to customer balances and transactions were difficult.- And we kept coming up with new needs for data and each need was separately addressed.- For instance, we added a credit and market risk analysis system.- We wrote an ETL link for each of our ancient banking systems to the new system.- Huge amount of work.- Our bankers needed a way to easily lookup info on their customers.- Another ETL and system just for that.- Then we needed new end of day reports - we finally bought SYBASE and developed a daily ETL for that, just for the daily reports.-

And if you are wondering, NO, I was not the CIO.- At that point in my career the person who was CIO had little interest in thoughts of anyone below him, let alone mine.- He never seemed to notice that we kept doing, essentially, the same projects over and over again.- Each time it was about getting access to the data - but for a single purpose.- No foresight whatsoever.-

One thing is clear from those days; it was next to impossible to get a clear, complete picture of the business we were doing with a given customer, let alone its profitability or risk.- But even today there are still plenty of banks with numerous antique systems each operating in complete disregard for the rest of the systems in the same bank.- One can do daily ETL's to a common database but these day's daily data can be next to useless.- IOTW, it is well past time for many banks to finally accept that they need unified systems where they can see any data in real time as needed to monitor risk and meet other regulatory needs.
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