What is the Cost of Relying on Data That is Only Probably Right?

PeerNova
PeerNova
May 20 · 4 min read

By David Levine — Data Product Strategy, PeerNova, Inc.

“Golden” has long been associated with the “best.” In the world of Data, the quest for a “Golden Source” has existed since humans started creating symbols to count harvests. In fact, PeerNova’s Cuneiform Platform is named after one of the earliest human systems for encoding information — we at PeerNova are well aware of the effort to create reliable data.

The “best data” has often been called “Golden” and goes by many names such as “Single Source of Truth” or “System of Record.” Financial Institutions and Market Infrastructure providers have extensive teams, located globally, which maintain their large data assets and infrastructure. These systems are governed by schemes like “Master Data Management” that operate to establish and maintain consistent data and are provided and supported by top data vendors and consulting firms. As the quest for the “pot of gold at the end of the rainbow,” the “Golden Source” has been a much sought after item, creating new database concepts and waves of business for technology companies.

As one who has spent time managing and wrangling data in financial services, I know the effort and ongoing work to organize, place in a known state, perpetuate and maintain data sets. For PeerNova’s Financial Industry customers, a primary business challenge is keeping data in sync and without breaks across their enterprise.

In the financial markets, as my colleague Mark Jennis has written, reconciliations of crucial operational data are an “age-old problem” in areas of post-trade processing for Financial Institutions, like operations, settlement, collateral, and treasury. Why is this so? Because financial markets are fragmented and siloed (what we at PeerNova call “external friction”), firms have numerous internal systems built up over time, across geographies and legal entities, or obtained through acquisitions. There are inevitable variances in databases in how assets, even the same ones, are represented as data as they flow through Financial Institution systems (which we call “internal friction”). Exception resolution remains a significant task, addressed by large operations teams, and with high business costs.

These frictions generate variances — breaks — which occur over the course of post-trade operations. Exceptions and breaks are a constant, and significant reconciliation efforts remain a fact of life for Financial Institutions. Data — as a representation of an asset — gets disconnected from the lifecycle events that transform it, so that even copies of the same asset can be in different states in different databases and stored with different attributes. Our clients tell us that there has been significant progress over the years but that getting to a “Golden Source” remains challenging and expensive in time and effort.

Systems generate error or exception reports that must be acted on semi-manually or manually to be resolved, often across departments and geographies, only for the process to repeat in the next cycle. Here at PeerNova, to address these problems of “internal friction” in reconciliation, and in data synchronization, the Cuneiform Platform creates a guaranteed Golden Source of data and its lifecycle events together, with end-to-end event lineage and visibility to deliver data that is guaranteed to be reliable.

PeerNova recognizes that solving the reconciliation problem for our customers, and then automating its resolution in the future with perpetual reconciliation, is the real solution and the first step on a greater journey to data transformation. Problems in reconciliation that once took hours of on- and off-line effort can be solved quickly and in real time. This is truly a Golden Source that enables customers to move beyond the repeated nightly cycle of exceptions, break fixes, and resolutions and establish a process that is a true step forward from the current state of operations. This is a powerful tool for addressing core Financial Institution reconciliation data problems in a world where data is recognized as being as important as gold.

At PeerNova, we believe that a Golden Source is the prerequisite and the beginning of the journey on the path to digitization for financial institutions (e.g. transaction data, market data, reference data, meta-data) as well as creating new opportunities for Data Monetization. On the path to digitization, once a dataset’s data and lifecycle events are in a known state with lineage, new opportunities are possible: A Golden Source can then enable the establishment of an internal DLT network, as a prerequisite is a single source of truth. For more on Digitization and the journey to an internal DLT, see my colleague Pravin Halady’s blog on “Integrating DLT with Internal Systems: The Elephant in the Room”. Please contact us if you and your institution would like to learn more about how the PeerNova helps customers transform their data to address internal and external friction.

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