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Data Volatility: Mitigating the Unexpected

Financial data management is difficult enough at the best of times. Data management teams at buy-side firms source data from an ever-growing range of providers including, but not limited to, benchmark and index providers; Exchange-Traded Fund (ETF) issuers; Environmental, Social and Governance (ESG) research providers and countless ‘alternative’ data sources. Collecting, standardizing, validating and distributing this huge volume of data is one of the greatest challenges facing data management teams today.

However, what makes this challenge exponentially more difficult to meet is that none of this data is static. A wide range of externalities can, without a moment’s notice, reshape any one of the many data feeds that firms rely on for their day-to-day activities. Data vendors may inadvertently issue incorrect data, technical faults may disrupt feeds, or regulatory rules may force benchmark providers to change tack. How do you ensure that in the midst of all this change your data is complete, accurate and timely?

Buy-side firms need to have in place a data management approach that can account for the unexpected and flex dynamically and seamlessly to mitigate the negative consequences of disruption to the overall data ecosystem.

Rhys Chapman, Global Head of Client Services, explains further: “At RIMES, we believe that the best approach to data management is to use managed services from specialist providers. This allows data management teams to free themselves of laborious day-to-day data validation and integration work, but is also means they can rest-assured that in the case of disruption to the data market they’re in safe hands.

“In fact, we’ve recently been involved in two situations where we’ve mitigated the challenges caused by disruption for our clients. In one case, a data vendor had inadvertently provided duplicate identifiers for two securities associated with a merger; something that could cause potentially significant referencing issues in clients’ production environments. Our validation checks spotted the problem immediately and we worked with the data vendor to solve it before clients were even aware of the issue. This involved us correcting content on 350 held feeds and 700 files, which we completed and restated within hours of the issue being spotted.

“Another case was when a stock exchange pricing feed went down due to a technical problem. This fault caused delays in marking the end-of-day closing price values of the securities listed on the exchange, and subsequently many related indices. This significant market event was flagged within hours, which allowed us to notify our clients and allocate additional resources. We worked with multiple data providers on the issue and kept our clients up to date as the event unfolded. Our global team was deployed to work on the issue while simultaneously processing the normal peak volume. We fully validated every impacted database and client file. In practice, this translated to processing more than 50% of a month’s data correction volume in just two days.”

With data management becoming increasingly complex, firms must do more to protect themselves from unexpected events, service disruptions and data errors. Partnering with managed service providers like RIMES is a proven way to do just that.

RIMES Managed Data Services is a proven data operating platform that helps firms of all sizes and in all regions align their data consumption closely with business needs and react to unforeseen data events. Contact us to learn more.

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