VIDEO | Managing data today is about creating a curated experience, so clients can have what they want, when they want it. In the session titled “Optimising your operating model for resiliency and scalability” at the PostTrade 360° Nordic 2024 conference, Francisco Ceballos and Adam Watson of BNY discussed how data plays into the industry’s new idea of resiliency.
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Watson kicked off the session with a quick poll to the audience: “Hands up if you think you’ve got a grasp on your data strategy for the next three to five years.”
In response, no hands were raised.
“That’s consistent across the industry,” he assured the audience. The regional banking crisis in the US last year had led him to observe that “resiliency means something different to our clients than it did two or three years ago”.
From the technology perspective, resiliency used to be about bringing systems back up as quickly as possible in the event of an outtage. Today, however, it has “moprhed into something bigger” that “leads itself to a conversation around data as an underpinning”.
“A resilient platform is one that addresses the entire post-trade value chain,” Ceballos said. “This is something that requires not just an understanding of how the data flows from point A to point B, but what the data really means.”
Against the grain
Trustworthiness and easy integration have become the main features clients demand of the data they use; getting ahead is the main desired outcome. This goes against the grain of what custody is about. Watson described custody as traditionally “an exception business” – “An exception happens and then you resolve it.” Today, however, that is no longer good enough.
Take the US’s transition to T+1, for example: “If you are a buy-side or a sell-side institution that’s not based in the US, you can’t wait to come in the next morning, have a problem, and then resolve it. There’s just not enough time in the day in that particular market,” Watson pointed out. Using data is now about isolating potential problems before they become issues that are financially impacting.
The ideal
For Ceballlos, the “holy grail” would be an “orchestration engine” that handles everything from approvals and access to timeliness and accuracy of the data. “Almost as if it were a distributed ledger of sorts that can help our clients achieve resiliency and scalability in terms of simultaneity and instantaneity of data – it’s here, and it’s available to me. I need to go ahead and use it right now.”
“We are living in a world where data is heavily siloed, is in many different sources, and comes in very different formats,” he said. “What we need is to have a better or an easier way of handling that data.”
Scalability
The goal is to get to the point where data can be used to support growth. To illustrate, Watson drew out the scenario of an asset manager looking for just-in-time delivery for operations. This would require an operating model similar to a construction line, where people are available “just in time to take an action to move the process along”, and would only be possible if the firm is investing in its data architecture and infrastructure. “We can’t have people in operational hubs around the world waiting for problems to happen,” he said. Instead, it’s about integrating AI and analytics into an operating model that “allows you to be more proactive in your construction line methodology”.
Ceballos shared that one way to achieve this would be by observing patterns in data that has evolved over time. Such predictive behaviour builds more resilient, informative platforms, keeps workflows smoother, and can be used to encourage a more proactive, rather than reactive way of working. A part of his work involves helping clients build datasets “that mean something to them” – “They are curated experiences, if you will.”
For Watson, everything ties back to trust – creating a solution that “builds trust in the data” so that clients can “focus on alpha creation”.
Speakers:
Francisco Ceballos, Head of Product, Data and AI, BNY
Adam Watson, Global Head Commercial Product- Custody, BNY
Hosted by BNY
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