FIMA Last Week - Reference Data Utility Discussion

Reference data management, which is critical to every financial institution, is not an exciting subject.  The rewards for getting it right are small while the consequences for getting it wrong - settlement risk, legal risk, financial risk, regulatory risk - are immense.  So Worldwide Business Research gathers together practitioners from banks and other financial institutions to swap ideas and best practices.  The interesting thing about this conference is that at various times the attendees believe reference data management can provide their organizations with a competitive advantage and at other times they believe this activity is in some respects a commodity operation that cannot provide any advantage at all.
With this in mind, the most interesting discussion at the conference involved the possibility of the creation of a Reference Data Utility - a cooperative approach among market participants to solve a common problem.  Millions of dollars are being "wasted" at financial institutions executing similar processes for marginal competitive advantage.  According to John Bottega, Chief Data Officer of Citigroup, "this is pipes and plumbing."
There have been attempts to get a reference data utility together in the past; most the conference attendees who commented upon this said the timing was not right.  But Ian Webster of Barclays Global Investors said, "this will happen in a few years."  Ian continued, "the failures have taken a theoretical approach.  The service perspective has not been offered.  The business models have had nothing compelling - they don't save money, they cost money (up front) and there is big implementation risk."
The challenge in bringing this together are largely one of what the business model is: who is in control, what is the ROI on the initial investment and can one size or one approach fit all.  With margins on the street clearly decreasing over the current cycle and the size of the reference data management problem increasing, another stab at this problem is likely to develop in the short term.