Evolving Operations: Leaving the Data Dinosaurs behind
By James Maxfield, Chief Product Officer.
Picture the scene: it’s Sibos and there’s a queue of industry professionals at the Duco booth, trying to win a cuddly dinosaur out of a claw machine.
The manual, unpredictable nature of that on-premise arcade game hinted at the story behind the prizes. The plushies were desirable, but the real-world problems they represented certainly weren’t.
Data Dinosaurs – outdated technology and ways of working – are a real problem in capital markets, keeping firms inefficient and inagile for years.
But no longer. Evolution was inevitable, and technology and firms have both moved on. The time of the Data Dinosaurs is over – the Data Automation Age is beginning.
Capital markets has a dinosaur problem
It’s hard to emphasise just how ancient some of the technology and practices in capital markets really are. That’s why we labelled them as dinosaurs. We have seen:
- Firms on the same version of their on-premise software for 10+ years due to the challenges of upgrading.
- A proliferation of spreadsheets where systems aren’t able to talk to each other, or need data in different formats.
- In extreme cases: print outs and highlighter pens used to flag data discrepancies!
These are all caused by Data Dinosaurs, and capital markets is rife with them. These creatures are born out of the need to get things done and not having had a better way to go about it.
Four of the most common are T-Recs, Onpremosaur, Duplicateworkodocus and Triceratoperations. Find out more about each one and the problems they cause, or read on to see why their time is finally over.
A new age finally dawns
Dinosaur technology didn’t just dictate what capital markets firms could do with their data; it shaped how they thought about data. It created dinosaur processes and ways of working. This is why Data Dinosaurs have remained so entrenched, despite their many obvious and painful shortcomings.
But now the days of the Data Dinosaurs are numbered. Their dominance is being challenged on multiple fronts. Not only has technology moved on significantly, but the market has changed and firms are no longer able to meet their strategic goals with their existing operating models.
The intersection of new technologies such as cloud computing, no-code applications and artificial intelligence have given rise to data automation: a transformational approach to tackling the effort, cost and risk associated with managing data. It is how modern businesses can finally tackle and overcome the historic challenges they have faced with their data.
Operations that leverage the cloud aren’t weighed down by cumbersome Onpremosaurs. They aren’t stuck with tech that requires constant IT maintenance and traps you into a cycle of costly, mandatory, and often useless upgrades.
Instead, they tap into the near-infinite computational power of the cloud and all the benefits of Software-as-a-Service (SaaS) instead. This includes access to a platform that is constantly updated with everything from performance improvements to new features. All this results in multi-million dollar savings each year on licences, hardware, maintenance and IT resources.
This has a knock-on effect on your people and processes as well. The inagility of Onpremosaurs comes in part from their hard-coded nature. Every change, whether onboarding a new reconciliation or just tweaking an existing process, requires developers to build, implement and test.
Platforms in the Data Automation Age leverage no-code functionality to empower business users to build these controls themselves. This delivers a massive agility boost, while IT ensures best-practices are followed around governance at a platform level.
The rapid time-to-market of processes in the Data Automation Age is one of the main reasons why no one has to resort to spreadsheets anymore. There is no longer a choice between getting it done and adhering to best practice.
The other reason is that data automation platforms, unlike Data Dinosaurs, aren’t fussy when it comes to the data they ingest. They are schema free, able to parse data in different formats and leverage the power of AI to extract data from even unstructured sources like PDFs or emails.
In other words, all those things that made reconciliation such a fearsome and troublesome prospect are gone.
A world free of Data Dinosaurs
Several things happen when you replace a web of disparate technology and manual processes with an agile data automation platform.
First of all, data quality skyrockets and the impact of bad data is mitigated. How? Well, exceptions in your data are a massive automation blocker, especially when they’re caused by the very system that’s supposed to be letting you know about genuine errors.
Therefore, being able to spot matches at a significantly higher rate than dinosaur technology is a vital capability of a platform in the Data Automation Age.
Better match rates means fewer false exceptions to deal with. This massively frees up time for your teams. Instead of wading through the same repetitive and routine tasks every day, they can focus on finding out what’s causing the real errors in your data.
Because they’re able to do this, they can fix these problems at source, removing even more exceptions downstream.
In other words, a data automation platform creates a virtuous cycle, where fewer exceptions enables you to crack down on the cause of exceptions, which reduces exceptions even further, and so on.
Secondly, it drastically simplifies your Operations, for two reasons. One is that firms may have resorted to trying to force data through a system not designed for it, such as reconciling derivatives on a platform made for cash.
This usually means chunking the data up into multiple processes, so your derivatives rec is actually several derivatives recs. Two, no one in your firm trusts your data, so when different teams need to use it, they all create a copy and transform, reconcile and enrich it separately to suit their own purposes.
Neither of these things happens in the Data Automation Age. A single platform centralises and streamlines all processes. You have fewer, more comprehensive, more transparent controls. And because it’s a centralised platform, accessible from anywhere, every team in the business can build processes using the same data and the same best practices.
This removes duplicate work, and even enables you to build a faster, more efficient operating model.
After all, why attempt to herd a slow, lumbering operating model towards your goals when there’s a faster, smarter and more efficient way to run your business?
One where trusted data is at the heart of your architecture. Processes are proactive, ensuring that accurate data is available when you need it. No more reacting to messes downstream. No more “shadow IT” and processes rife with operational risk.
Ultimately, why put up with anything that generates cost, risk and manual work, when you’re trying to reduce all of those things? In the land of the Data Dinosaurs you’ll always have to bend your way of working around what’s possible with the technology.
In the Data Automation Age, the technology is flexible enough to work around you. It’s a faster, smarter, efficient and transparent way of working – and an environment that Data Dinosaurs simply can’t survive in.
Operations is evolving
Data Dinosaurs are facing challenges on numerous fronts. New technology provides you with a genuine alternative, one that is much better suited to the needs of a modern business. Changing attitudes in the market, from firm’s priorities to regulator’s demands, require things that dino tech and practices simply can’t provide.
The same is true for the needs of the modern workforce. Young talent wants to do something more meaningful than wrangle with T-Recs or Onpremosaur.
It’s these desires – and more – combined with the flexibility of truly agile technology that will shape the next age of capital markets operations. The Data Automation Age is already dawning. The time of the Data Dinosaurs is over.