Wednesday, October 11, 2006

A waiting game

In typical SWIFT fashion, the banking co-op has seized on reference data like it has most things; SEPA, derivatives processing, corporate actions; saying that it can bring the collaborative problem solving capabilities that are needed to resolve the reference data conundrum. A good example of its expertise in this area, it says is its experience in managing the BIC directory service, which also incorporates national clearing codes.

But is SWIFT really the answer to the problem of reference data, or is it part of the problem? The reason I say that is that companies like Asset Control have been in discussions about providing a joint reference data solution with SWIFT for the last two years. Reference data is one of the underlying themes of SWIFT's 2010 strategy, and Ger Rosenkamp, CEO of Asset Control, believes that his company of 16 years is the unequivocal choice in terms of who the banking co-operative should partner with in the area of reference data management.

Leveraging its centralised data management model, which encourages firms to dispense with multiple data silos, Asset Control joined forces with Accenture to develops its ACDEX outsourced data management solution for handling pricing, reference, counterparty and other data.

Asset Control provides the technology platform for ACDEX and Accenture provides the outsourcing service on top of that capturing Asset Control data which it then manually cleanses. Currently two customers have signed up for ACDEX, a third is expected to be announced soon. "The logical idea would be for SWIFT to provide the network that connects all the financial institutions," says Rosenkamp. But when has SWIFT and logical ever been synonymous?

In typical procrastination fashion (it is the usual joke about how swift is SWIFT), SWIFT is biding its time. "SWIFT needs to make a clear decision about what they want," said Rosenkamp. "What SWIFT wants is very ambitious," he says referring to its ambitions to manage a specific set of reference data around BICs. Yet, Rosenkamp says SWIFT's requirements do not go beyond those of its customers, which are largely Tier 1 firms.

Although banks are still getting to grips with the outsourced data management model, Rosenkamp believes that in five years, ACDEX will be the dominant player and says it has already proved it can increase the efficiency of reference data by 30%.

For Rosenkamp, the choice of who SWIFT should partner with in the reference data space is obvious. But as usual the market must wait for SWIFT to decide what direction it is going to take.

1 comment:

FinancialTech Insider said...

Some of you may have noticed that in my post on reference data from the Sibos conference in Sydney, I confused Asset Control's ACDEX, an outsourced service that manages the quality, integrity and distribution of securities-related data with Accenture's Managed Reference Data Service, based on Asset Control's AC Plus technology. The two are separate solutions. Apologies for the confusion.