An Open Source Financial Instrument Global Identification Framework is Critical for Support of Emerging Financial Technology Trends and Innovation: TABB Group Research

NEW YORK and LONDON, March 13, 2017 -- Data professionals across all segments of the financial industry are struggling on a daily basis to maintain data quality. According to TABB Group’s latest research, “Building a Framework for Innovation and Interoperability,” firms are heavily challenged by the current state of having multiple security masters and often suffer real operational pain due to inaccurate or insufficient financial instrument identification. The study, which was based on outreach to more than 180 financial services entities, explores the current state of financial instrument identification and the resulting operational issues currently being faced by the securities industry.

Report author and TABB senior analyst Dayle Scher found that regardless of the current measured rate of adoption, the majority of the industry agrees that there is currently a need for a global standard identification methodology, with the top reason for adopting being data quality improvement within the enterprise. During TABB’s outreach for the study, 95% of respondents listed poor data quality and the resulting difficulties in tracking data lineage as one of their top three pain points. Despite the potential benefits, hurdles for adoption exist, most notably that they remain unconvinced about the need for “yet another identifier” and are dubious about associated costs.

“It should be stressed that an open framework does not mean the elimination of legacy identifiers and can be adopted within an existing enterprise architecture with some modification,” says Scher. “Any cost savings realized would mainly be the result of increased data quality, directly and indirectly impacting operational efficiencies achieved by the reduction in manual mapping and cross-referencing activity.”

The research examines not just operational impacts of an open source financial instrument global identification framework, but also looks at the need for such a framework to support emerging financial technology trends and innovation. As Scher details in the report, a data framework to enable a standard to emerge can be a critical component in the success of major initiatives such as blockchain and a perpetual non-changing digital identifier that is openly accessible and covers all tradeable assets ticks the right boxes for the industry.

About TABB Group
TABB Group is the international research and consulting firm focused exclusively on capital markets. For 14 years, TABB Group has been helping business leaders gain a truer understanding of financial markets issues to develop actionable roadmaps and approaches to future growth. By accurately assessing their customer base, competition, and key market opportunities, TABB Group works with senior industry leaders to make critical decisions about their business. For more information, visit www.tabbgroup.com.

Contact:
Casey Sheets, TABB Group
+1 646-747-3207 / [email protected]