Management of reference data is a hefty expense (~$10b/year) for the financial services industry. Each firm devotes man power and dollars to create, clean and fix the data. To address this industry-wide challenge, SmartStream, along with Goldman Sachs, JP Morgan Chase and Morgan Stanley, have built a utilty they jointly own named Securities Product Reference Data (SPReD). The goal is to replace internal reference data management and cleansing processes and “do it once for the street,” rather than on an individual firm basis.
Duplicative spending on reference data and its management continues to be a pain point both for individual firms and for the capital markets industry as a whole. By banding together, firms can start to reduce their dependency on proprietary infrastructure and begin to realize the benefits of a shared-services model. This shared approach for reference data management is just the beginning of the transformation of the back office, according to Philippe Chambadal, CEO of SmartStream, who sat down with TABB Group founder and CEO Larry Tabb at TabbFORUM’s MarketTech 2015 conference to examine the issue. The domain of reference data management is a non-differentiated task and grudge expenditure that must be performed by every firm that wants to operate within the financial services industry.