Data Management

10:29 AM
50%
50%

The OFR Annual Report: Helpful Advice in Managing Data Standards

The OFR is making progress with LEIs and is providing guidelines for how it manages different data standards.

In my last two articles (Rags To Riches and Connectivity, Contagion and Risk), I summarized what the recently-released annual report from the U.S. Department of the Treasury's Office of Financial Research (OFR) had to say on the stability of our financial system and on the measurement of contagion risk. In this final article based on the report, I conclude with the OFR's progress and outlook on promoting data standards.

The OFR has a congressionally-mandated responsibility for providing advice, support and leadership in the development, use and integration of financial data standards. According to the OFR, during the recent financial crisis "[t]he lack of consistent standards for precisely identifying financial entities and defining financial instruments prevented institutions from assessing and measuring building risks within and across business lines."

The OFR defines four categories of financial data standards:

  • Entity identifiers
  • Instrument identifiers
  • Standards for financial and business reporting
  • Transaction standards

In the report, the OFR provides a summary of the history, status and prospects for Legal Entity Identifiers (LEIs), their top data standards priority. In addition, and in my view of more value, they provide pragmatic guidance on how to assess potential data standards projects. The three critical questions posed by the OFR are whether or not the potential standards development effort is within their scope and mission, whether or not it is a good candidate, and finally what their role in the effort should be. These guidelines can be applied by any organization to gate their data standards program and optimize resource allocations.

The OFR's Data Standardization Considerations
View Larger
The OFR's Data Standardization Considerations

The discussion in the report on what makes a good candidate for standardization is particularly valuable, as it covers not just the criteria for selection but the criteria for success, e.g. the participants "must have the technologies, formats, and processes required to submit and accept the data."

Additional useful guidance is provided in the form of a short list of eight "principles for data collection" which include such insights as "Use validation controls at the point of data collection in the form of submittal failures or messaging" and "Give participants time to test their data formation process and submittal system."

In the final section of the report, "Improving the Integrity of Reported Data," the OFR discusses the goals and shortcoming of the CFTC-issued rules on OTC derivatives data. While the conclusion is not news -- the lack of a required data format defined in detail has "hampered regulators efforts to aggregate and analyze the data" -- it is refreshing that the OFR both recognizes the problem and is committed to addressing it.

Jennifer L. Costley, Ph.D. is a scientifically-trained technologist with broad multidisciplinary experience in enterprise architecture, software development, line management and infrastructure operations, primarily (although not exclusively) in capital markets. She is also a ... View Full Bio
Comment  | 
Print  | 
More Insights
More Commentary
One Size Fits Nobody in End User Services
How building profiles from employees' roles and behaviors can help optimize your end user services.
'Enlightened' Non-IT Execs More Likely To Run Secure Organization
Do senior executives understand their role in data security? On the whole, unsurprisingly, no.
No Screwups, Please, We’re Banks
Changing a bank's culture is not going to happen overnight, but having the right tools and levers in house will surely make a big difference over time.
You’re Doing BYOD Wrong: These Numbers Prove It
Almost 40% of users who connect personal mobile devices to corporate networks have no lock-screen mechanism set in place.
Citibank Brazil Deploys Award-Winning BPM Solution: Now What?
Citibank Brazil automated commercial customer onboarding and reduced cycle time by 70%. But how can a global organization harness the successes of its islands of solutions?
Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - Elite 8, October 2014
The in-depth profiles of this year's Elite 8 honorees focus on leadership, talent recruitment, big data, analytics, mobile, and more.
Video
5 Things to Look For Before Accepting Terms & Conditions
5 Things to Look For Before Accepting Terms & Conditions
Is your corporate data at risk? Before uploading sensitive information to cloud services be sure to review these terms.