Reference Data Poses Significant Challenges for the Capital Markets, Study from Accenture and Greenwich Associates Shows
October 13 2015 - 3:03AM
Business Wire
Regulatory changes and data-quality issues are
driving costs higher
The majority of capital-markets firms say that data quality and
regulatory changes are impacting costs and driving firms to examine
replacing siloed data-management systems, according to a global
study of buy- and sell-side professionals conducted by Accenture
(NYSE:ACN) and Greenwich Associates.
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In the study of 133 front-, middle- and back-office executives
in capital-markets firms, more than two-thirds (70 percent) of
respondents ranked data quality as a top issue affecting their
trading infrastructure, and nearly half (47 percent) said they find
it difficult to deliver solutions that meet these challenges.
“Management of reference data remains a big challenge for the
capital markets industry,” said Owen Jelf, global managing director
of Accenture’s capital markets business. “Though capital-markets
institutions spend more than $6 billion a year on reference data,
the industry continues to operate on legacy systems that often
don’t align, and data comes from multiple sources, in disparate
formats that require continuous data cleansing and reconciliation.
Firms would benefit from focused end-to-end multiple year
investment in developing ways to make meaningful, holistic changes
to fix this problem.”
In capital markets, reference data refers to financial data that
is generally focused on major categories common across many
processes, such as: instrument reference data; end-of-day pricing
data; corporate action notifications; client and counterparty data;
internal organization data; and other shared static data such as
calendars, currencies, countries and regions.
The study identified four key themes among all respondents:
data-quality issues continue to plague the industry; costs of
managing reference data continue to rise; regulatory requirements
are driving increasing burdens and adding to costs; and firms
continue to struggle with the need to balance streamlining business
operations while responding to a rapidly changing business
environment.
Though the study identified a variety of factors for rising
reference-data costs, one of the main challenges institutions face
is the growing regulatory burden. Nearly half (47 percent) of
respondents said they are struggling to meet regulatory
requirements, yet only slightly more than one-third have a formal
regulatory change program in place (36 percent) or have a
standardized approach to dealing with regulatory change (37
percent).
When asked to cite internal and external factors affecting
costs, more than one-third of respondents said they expect to see
an increase in operating costs (cited by 36 percent of
respondents) and IT costs (37 percent) over the next 12
months. The study also found that, on average, data licensing
continues to make up 33 percent of capital-markets firms’ overall
spend, and 41 percent of the respondents said they expect that
number to grow as data demands rise and providers become stricter
with licensing.
“The world’s leading capital markets firms can save millions of
dollars each year by embracing a mutualization model or a utility
to manage securities reference data,” says Dan Connell, Managing
Director and head of Market Structure and Technology at Greenwich
Associates. “A utility for reference data management can enhance
the settlement process, lower costs, and speed up compliance to
ongoing regulatory pressures and enable firms to focus on what they
do best.”
Please visit Accenture or Greenwich Associates to learn
more.
About Accenture
Accenture is a global management consulting, technology services
and outsourcing company, with more than 358,000 people serving
clients in more than 120 countries. Combining unparalleled
experience, comprehensive capabilities across all industries and
business functions, and extensive research on the world’s most
successful companies, Accenture collaborates with clients to help
them become high-performance businesses and governments. The
company generated net revenues of US$31.0 billion for the fiscal
year ended Aug. 31, 2015. Its home page is www.accenture.com.
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AccentureDamon Leavell, +
1-917-452-4083damon.leavell@accenture.comorFrancois Luu, + 33 1 53
23 68 55francois.luu@accenture.com
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