The FICC Markets Standards Board (FMSB) in its latest Spotlight Review warns that if markets are to remain stable and trusted, fair and effective, then the rapid growth of new technology and of data science must be balanced with more effective governance and control.
The report, which examines the crucial role of data management in the stability and resilience of wholesale FICC markets and financial systems, notes that the exponential growth of electronic trading in the past two decades, coupled with increased electronic reporting requirements, has significantly increased the quantum of transaction data – and while this has increased transparency and improved the overall efficiency of FICC markets, there remain notable issues with the clarity, consistency and ease of use of data that should be addresses through a standardised approach to data governance.
Data runs through all the infrastructure of participants in global wholesale FICC markets, including the pricing, order and trade management, risk management, regulatory reporting, financial and corporate systems. These systems continuously process and feed data around the organisation, and each system plays a different part in storing, processing, enhancing and transmitting data. Data is duplicated, aggregated, integrated, cleansed, enhanced and acted upon in real time, in multiple locations around the world – and failure to exercise appropriate controls over data, warns FMSB, could significantly increase the risks to organisations and market functioning, from both a reputational and financial perspective.