Vendors Lay Out Their Plans for Reference-Data Services

Capco Expands Global Index Processing to Reference Data

"You don't need to think of [reference-data] processing in a holistic way," says Predrag Dizdarevic, executive vice president at Capco, who runs Capco Reference Data Services (CRDS). He says a client may choose to do part of its reference-data processing such as equity or fixed income with a vendor or focus on a niche such as index processing, which is Capco's specialty. In early 2004, Capco augmented its capabilities with the acquisition of Iverson Financial Systems, which processed global indices for clients like the American Stock Exchange. CRDS provides reference-data processing services support for 30 customers, including a number of tier-one firms, and operates on a global basis, 24X6, when trades are happening in local markets. Capco operates an onshore facility in Sunnyvale, Calif., that covers the U.S. time zone and handles client facing and vendors, plus an offshore facility in Bangalore, India, where data analysts do research and cover the night time zones.

Today, Capco provides data for indices globally -- it collects the data from various sources, including exchanges, index sponsors and data vendors, through Web sites, e-mails and faxes. It verifies the data and processes it based on service level agreements (SLAs) with clients. It also provides corporate actions on the constituent parts of the index. "We think that definitely this is the area that the financial institutions are now starting to accept -- as long as it does provide the right price and guarantees the levels of the quality and timeliness," says Dizdarevic, who was previously the CEO of Financial Technology International, among the leading providers of reference data models.

Going forward, Dizdarevic sees potential to provide various forms of customized outsourcing: In one case, Capco could be hired to maintain technology and handle technology development and operate the technology on an ASP basis. A second option is to have Capco run global operations on a 24-hour basis within the customer's firewalls. This entails managing the data vendors on a daily basis; looking for exceptions and calling the customers if it finds any errors; researching any deviations from the norm; and also acting as the client's internal help desk with calls routed to Capco. "We manage the whole process -- verifications, building the composite data and making sure it goes into the downstream systems, but within their technology environment," says Dizdarevic.

A third type of outsourcing is when the client has its own process and technology, but asks Capco to provide data extracts in a certain format, as stipulated in an SLA. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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