Financial firms overhaul data management strategies


As the grinding recession and sloth-like recovery moves into its fifth year, investment firms are finally getting their data management in order. While this may sound like an easy (if dull) job, think again. The first wave of layoffs in 2008 were the back office workers who will be needed to write the code and build these data systems.

Why the final, "we mean it this time" push for data management? In one word: Risk.

As Melanie Rodier of Wall Street & Technology writes, "Regulators are continuing to ramp up scrutiny of exchanges, brokerages, hedge funds and every financial firm in between. What has become crystal clear, in light of post-financial-crisis economic conditions as well as a slew of recent high-profile technology glitches, is that the tolerance for risk is at an all-time low."

She adds that these firms are looking for more efficient ways to address their IT issues, including data management processes. "They are looking into new ways of approaching macro data management," says Larry Tabb, of market research firm TABB Group.

He adds that, "Some financial institutions have started focusing on higher-grade analytics to try to find patterns in data, Tabb notes. One of their current priorities is trying to gain analytical insight into unstructured data, with open source platforms such as Hadoop rapidly gaining popularity across the capital markets."

While this is welcome news it still remains to be seen if banks are actively pursuing these strategies or just paying lip service to placate CEOs and shareholders. Data management is a boring job with little initial reward -- its rewards are down the road and often in the background.

After all, what would a CIO rather work on: a flashy new trading platform or cleaning up the data that's flooding the servers in the back office?

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