In the rapidly evolving financial sector, the integration and management of data have become pivotal. Historically, the industry has grappled with persistent challenges pertaining to data management—issues such as asset matching, issuer matching, data quality, data lineage, and establishing comprehensive data dictionaries. These are not new problems; they have been subjects of discussion for decades, yet tangible progress has been elusive. One core reason for this stagnation is the industry’s adherence to traditional concepts, like the notion of a singular, authoritative ‘data master.’
For over fifteen years, I have collaborated with numerous organisations, all united by a common goal: to establish a consistent data framework by creating a centralised ‘single source of truth.’ This model, often called the ‘hub and spoke’ model, envisions a central hub disseminating data to various spokes. This approach has yielded significant benefits in some cases, streamlining data flow and enhancing consistency. However, it’s not a one-size-fits-all solution. In certain organisations, the effectiveness of this model rapidly diminishes as data transitions from the central hub to the spokes, where end-users frequently alter it. This modification leads to discrepancies, spawning multiple ‘versions of the truth’ and, consequently, complaints about data integrity.
This phenomenon prompts a critical question: how can we maintain data consistency across diverse financial systems such as finance systems, risk management systems, performance systems, and order management systems? The answer might lie in evolving our perspective and drawing inspiration from technological advancements in other domains.
Consider the transformation in data synchronisation seen in personal technology over the past two decades. The advent of the first generation of smartphones, operating on Windows and utilising tools like Microsoft ActiveSync, marked the beginning of data synchronisation between devices. However, these early methods necessitated a ‘master’ device, which would override the other in case of discrepancies. This concept has been profoundly transformed in today’s interconnected world. Now, seamless synchronisation is not just a convenience but an expectation. Whether resuming a show on a different device or accessing photos across platforms, data synchronisation happens in real-time, with no ‘master’ source.
Why shouldn’t the financial services sector aspire to this level of synchronisation? This is where DataSync comes into its own, and it’s time to embrace it. Envision a scenario where each implemented system pushes out data upon modification (ideally through an API) and integrates changes seamlessly. Imagine all these systems interconnected through a cloud-based data lake, employing event-based logic to trigger actions upon data receipt or alteration. This data lake would recognise congruent data from different sources and reconcile it to deduce the most up-to-date ‘version of the truth,’ subsequently disseminating this verified data across all necessary systems. This would eradicate the need for a ‘data master,’ replacing it with a dynamic, real-time ‘data sync.’
Moreover, this approach allows for robust governance. Source systems can be equipped with controls to ensure that alterations are legitimate and authorised, creating a cascade of validated changes across the network. Audit trails, mandatory explanations for modifications, and system alerts informing stakeholders of changes and their triggers all contribute to a transparent, accountable, and efficient data management ecosystem.
In conclusion, it’s not just about adapting to the times; it’s about leading the charge towards a future where financial services data is managed and dynamically synchronised, mirroring the seamless interconnectivity we experience in our daily technological interactions. It’s time to replace the outdated ‘data master’ with a sophisticated, integrated ‘data sync’ model, paving the way for an era of enhanced efficiency, accuracy, and transparency in financial data management.