Do you Trust your Static Data?
Recently a Scandinavian bank lost $1.5 million in a single click while trading bonds with early redemptions. The reason was lack of comprehensive security detail information in their systems, which included SimCorp Dimension®.
The trader believed he had all necessary information available when executing the order. However, as so often with financial data, there was erroneous information in data delivered from stock exchanges, news agencies and security depositories. And on top of that the bank missed an important data update. So, based on bad data the deal was made.
The bank realized they needed to act and act fast. But what do you do in such a situation? There are few data providers and they all come at a considerable cost. Of course, the price tag like the one faced by the Scandinavian client can cover a lot of software solutions and data request. But smaller companies still cannot afford a massive spending like this.
When the Scandinavian bank decided to implement a solution by a small data provider called StaticData®, that caught our attention. The solution is tailored to SCD which allowed them to get a solution into production in a few days.
It is not a big secret that all buy-side firms struggle with data quality from their data providers. If you get the data either from a data firm, directly from an exchange or from any other source, the data generally needs validation. Time-consuming research and checking means that some essential data elements are missed causing decisions to be made on erroneous setups. Often due to human errors or even flawed decimals.
Since 1999, StaticData has specialized in ensuring errors like that does not occur. Therefore, none of the company's customers need worry about gaps in the data streams. It works seamlessly from all data sources for all asset classes. Or so they claim.
How do they do it? The provisioning of valid financial data sets is achieved through a unique interaction between careful conversion algorithms and a solid network of worldwide data providers. This combined with StaticData’s founder, Jørgen Kirkegaard’s, in-depth knowledge of Dimension’s import functions, data model and securities structure as well as how data is delivered from data providers allows StaticData to automatically convert data to the right formats for SCD. Before Jørgen started StaticData, he worked as a developer in Dimension and therefore understands the intricate data structure of SCD.
All data is converted into standard market codes with the option of adding specific customer requirements if required. Any adjustments to the system are added automatically without users having to worry about these.
Asking another of StaticData’s customer Rune Nordstrand (Vice President of Risk Management) from Sparebanken Møre in Norway he tells us that: ”We have had a long lasting relationship with StaticData because they provide reliable data and good services with high flexibility if we want to change our import settings. Here in Norway, the sector codes and municipality codes change sometimes, and StaticData helps us implement these codes automatically.”
Rune Nordstrand points out that the Norwegian bank has received offers from other data provider vendors, but these companies can’t match StaticData’s fees. The bank has even considered building an import feed for the financial data to their Dimension system themselves, but this implementation would cost a lot more than the subscription from StaticData.
”In our day-to-day activities StaticData is a time saver for us due to the company’s high flexibility and fast responses when we need any changes. I would highly recommend StaticData, especially to other smaller financial institutions as they can get fast access to support and start importing static data right away,” Rune Nordstrand says.
We asked Jørgen Kirkegaard from StaticData why you should consider their solution:
“Other customers have different needs than Sparebanken Møre, and StaticData can accommodate customization in the set up to meet clients need for automation and special requirements. If any settings need to be changed, StaticData of course has round-the-clock customer support. There is no longer any reason to stress about flawed master data or hide mistakes made in trades with invalid data sets.”
For clarification – the Scandinavian bank mentioned above that lost $1.5 million is not the one quoted in this article Sparebanken Møre.
StaticData delivers securities master data for all types of buy-side investment firms to be used throughout the organization. They source the data from multiple providers, transform, scrub and enhance the data, add new customized fields if required and deliver them overnight in the format required by the target system.