In signing up for Accenture's Managed Reference Data Services (MRDS), Wachovia joins a handful of firms opting to outsource reference data operations. With the deal Accenture will provide Wachovia with a managed service for product data, including everything from data sourcing and scrubbing to security, according to George Vega, managing director, global head of capital markets technology with Charlotte, N.C.-based Wachovia. The deal comes on the heels of a September announcement that Chicago-based Citadel Investment Group signed a 10-year agreement with Accenture MRDS for data management and other services.

"Potentially, we can expand that for counterparty data, but right now it's for product data," Wachovia's Vega says of the services to be provided by Accenture. "If we can leverage the same workflows, both from an operational perspective as well as from a technology workflow and solutions perspective, that would be a benefit."

But, as Vega observes, managed counterparty data capabilities still are at an early stage of development, and so Wachovia does not yet know whether its initiatives in this area will be retained in-house entirely, or if there are aspects it can hand off. "We'll know more probably early first quarter [2006] whether or not that is even viable," he says. For its part, Accenture is aiming to expand its capabilities from securities data into counterparty data and securities pricing in the latter part of 2006, according to Patricia Tsien, partner in charge of Accenture MRDS.

Generally, Accenture offers three tiers of service, Tsien relates: Gold and Gold Plus offerings, which are "one-to-many services, so we cleanse the data once and distribute to many"; and a Platinum level that is more of a one-to-one facility. The managed services, which are based on technology from Netherlands-based data management vendor Asset Control, take data from a variety of content providers - such as Reuters and Bloomberg, for example - as well as from the Depository Trust & Clearing Corp. (DTCC) for global corporate actions announcements.

The information is compared and contrasted. Exceptions are cleansed, enriched where required and then distributed to clients based on the service level for which they contracted, notes Tsien. "We can distribute directly into an in-house container for further distribution into their downstream applications," she adds.

A Hybrid Approach As with the Wachovia/Accenture deal, rather than outsource data management using a lift-out strategy or an application service provider, the more common approach now is the hybrid concept, according to Dale Richards, president and segment executive for enterprise data management with SunGard, which operates SunGard Data Management Solutions as a shared managed data service. Richards explains that with a hybrid approach, much of the base data handling, cleansing and arbitration, as well as the heavy lifting to take in multiple data feeds, can be done by an outsourcer. The information then is delivered to the client, which maintains an in-house data management organization of some type.

"Whatever technology they might use, ... the bottom line is that those environments are owned by the client," Richards says. "They need to be accountable directly to the trading desk, to compliance, risk management, to the ops people, to the research analysts - whoever it might be."