As data silos topple, data managers at investment firms find they must understand the business lines they serve
Data managers at investment firms used to bide their time overseeing the data needs of the back office, with its elaborate accounting and clearing systems. Front-office forays were rare and consisted of stoking the data fires in the various silos that dotted the corporate landscape, as each division of a company tended to its own information needs. Today, those data silos are toppling, and the role of the data manager is rapidly changing as firms consolidate their data and create a central structure for managing it.
Data truly is ubiquitous, the lifeblood of an organization. Not only must data managers be savvy technologists capable of keeping that information pure and pumping it through the corporate veins, they also must be astute business advisers who understand the business lines they serve as well as the problems business managers face.
Data managers' jobs have become so important that their positions are being elevated to a much higher level. Once relegated to the back office, they're now moving up the corporate ladder, possibly as high as the executive suite, with new titles such as chief data officer and data czar. The reason? Data managers need a holistic view of data, and they must be highly placed in their companies to achieve this. "They must have a holistic view from front to back," says Tom Jordan, CEO of Jordan & Jordan, a consulting firm for the financial industry. Going forward, Jordan says, there will be greater demand for data managers who understand the content and are capable of filling this new role.
One of the most critical issues that has pushed senior management to recognize the importance of data management has been compliance. It's a priority on every data manager's agenda. Data plays a vital role in complying with regulations such as Basel II and the USA Patriot Act and the increasing number of trading regulations from exchanges and market regulators. Management must have control and access to the appropriate data.
"There's an upward trend of working much more with legal and regulatory teams," says John White, principal of investment-management data services at State Street Global Advisors. Legislative initiatives such as Sarbanes-Oxley and the Patriot Act also have resulted in business units turning more to the data-management team to help them run audits and ensure that the facts and figures a company is generating are reliable and accurate, he says.
At State Street, a shift in thinking is under way about data and its role at investment-management firms. As a result, the company has consolidated its data departments and roles into one: the Investment Management Data Services group, headed by White. The goal is to manage the firm's investment data holistically. White's group includes business analysts who must have in-depth knowledge of each business line in order to provide appropriate data support. "They act as a liaison between the developers as well as the business. They understand investment data, bonds, equities, derivatives; they can speak the language of the business side," White says.
When it comes to compliance, the job is no longer a reactive role, says John Bottega, director and global head of product and price reference data at Credit Suisse First Boston. The role is now proactive, and data managers are looked upon to provide the information that a business unit needs to keep its workflow and processes in line with regulatory requirements, he says.
As a result, data managers need to manage data from the top down. Tim Lind, a director at consulting firm TowerGroup, says the key thing most data managers must come to grips with is setting a logical governance framework for their institution. "It's a complex environment they have to feed. There are so many stakeholders downstream that live or die on the data." That's especially true in the front office, where everyone from portfolio managers to traders rely on accurate information, and profitability depends on it. The task most data managers face at the moment is creating a centralized infrastructure from which clean data can flow downstream, Lind says.
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