With no fewer than five different data format "standards" currently in use industrywide, and countless proprietary and customized versions of these standards in use at individual firms, the financial services industry is in desperate need of a universally agreed upon solution, according to a recent report from Needham, Mass.-based TowerGroup. But the chances for such a solution to emerge from the current standards environment is slim, TowerGroup asserts.
The studywhich surveyed 50 professionals representing a variety of operational functions at investment managers, global banks and broker-dealersreports that half of those surveyed said current standards are insufficient as a basis for an internal data standard while 47 percent said that current standards are usable only when customized to meet the specific needs of the firm. That leaves a mere 3 percent of survey participants who believe that any of the current data format standards are functional as is.
When asked which standard most likely will be used in their firms, respondents' top answer, with 38 percent of the vote, was "Proprietary/Other." The No. 2 answer was the SWIFT/ISO 15022 format, which was named by 31 percent of respondents as the most likely to be used as a basis for internal data standards.
Responding to this state of affairs, in 2005, a team of representatives from top-tier financial services firms, along with data and software vendors, established an Enterprise Data Management (EDM) Council to discuss industry challenges and focus on improving data quality and distribution. According to TowerGroup, until leaders in the financial services industry, perhaps through the EDM Council, take charge of the situation, it appears as though the state of data will remain proprietary and segmented.