One of the drivers of change has been industry association FISD’s Financial Information Associate (FIA) certification program, which validates a candidate’s existing knowledge, and which has resulted in professional trainers creating a number of structured training courses around market and reference data issues to prepare candidates for the FIA exam—a 100-question multiple choice paper.

The FIA exam has been around since 2013, but FISD has just completed the first in a series of planned “Level 2” certifications focusing in greater depth on specific areas—the first of which covers data licensing issues. 

A fresh driver gives the lie to the idea that you never study data before joining the industry:

Mike Atkin, managing director of industry body the EDM Council—which already offers its own DCAM (Data Management Capability Model) certification—recently taught a module on data management at Columbia University in New York for students of finance and advanced analytics topics, who could benefit from understanding the legal issues governing the underlying data that is critical to their applications.

Though the course was not limited to data management in finance, Atkin says data management is a portable skill. And though the students had not dealt with data before, “they were very much attuned to recognizing data as a business asset. They understood data concepts such as representation, lineage, data quality, and central data attributes… and by the end of the course, they were qualified to respect the data… and understood that if you can’t trust your data, how can you trust your analytics?” he says. As a result, other academic institutions are now approaching Atkin about creating courses for them.

But until now, little formal training has existed. When Andrew Miller, managing director of consultancy Net Effect, who did the legwork of developing FISD’s latest program, entered the industry, training was a matter of absorbing the information that you worked with. To learn a subject in detail, you had to work on “deep and narrow” projects until you became a specialist. Miller was sent on an external course about financial markets and instruments, but it didn’t cover data.

The problem with learning in this manner is that you don’t know what you don’t know, and you don’t learn about areas that you haven’t been directly exposed to. “There’s a tendency for people who think they are experts to go on what they learned rather than how something is now. It’s not easy to stay up to date with all the licensing changes across more than 150 exchanges, as well as other trading venues, and vendors. So training is increasingly becoming a good idea—not just for consumers of data, but for anyone involved in the data lifecycle, and particularly developers,” Miller says.

Key to this is the realization that such a large proportion of people who work in the capital markets will encounter market data as part of their job, so few of whom fully understand its cost and the risks associated with not treating it correctly, and even fewer work in roles dedicated to managing it.

“To be effective in a role, you have to marry that with what the business is trying to achieve: It’s about being competent in data management, but also being able to add value to the business. So… it’s really a specialist subject, and training is very important to reinforce what you know and to demonstrate your abilities, and has been a missing ingredient in the career path for data management professionals,” says Chris Johnson, senior product manager for market data at HSBC Securities Services. 

Johnson, who was inducted into the Inside Market Data Hall of Fame earlier this year for his efforts to educate others across the industry about the data management aspects of upcoming regulations, says his work on the speaker circuit is as much about learning as it is about teaching others. “I discovered that the more you speak, the more you learn, and the more that people speak to you and give you feedback—so it’s a means to an end. It’s not just about educating; it’s about learning and realizing that things can be made better… and that this feeds into things that we do as a business,” he says.

Another driver for more structured training is the creation of new, regulated positions within firms that relate heavily to data—such as data protection officers, a role mandated for all companies in Europe under the General Data Protection Regulation, but which has not existed before, making it hard to find candidates with the right skillsets.

“Generally, tier-one firms are converting internal people into this role, such as chief data officers or chief technology officer-type positions, or someone from legal and compliance. They’ll need additional training and staff… to set up a structure of people with different skillsets,” says Stuart Tarmy, vice president of sales and business development at smart data discovery technology vendor Io-Tahoe, adding that some of these skills go beyond what can be learned in a classroom. “In this first wave, firms may have to pick their CDO by default. By the next generation, there will be more people with specific skills. Even someone coming from a data background will still need to learn how to deal with government agencies.”

Yet another driver is the argument that a rising tide raises all boats: that the more educated the industry is about data, the greater the likelihood that deals will be easier to negotiate, will suit the client better, and deliver a more productive long-term relationship for the vendor.

“The best salespeople I’ve ever met have extensive qualifications, and can talk at a very detailed level with very high-level people,” Miller says.

Access

So far, it has been regulation-driven issues that have commanded firms’ training budgets, over and above data management. One initiative that straddles both is AxiomSL’s recently launched regulatory education program, which comprises three tiers: “In the Know” briefs that summarize important regulatory change issues into consumable sound-bites; an “Explainer” series that clarifies regulatory terms in plain English, highlighting what user firms must know to be compliant; and a “COO Supper Club,” that allows senior finance and operational executives to meet on “neutral ground” to exchange ideas.

“The level of people we pitch this at… typically have a very good grasp of the issues. They wouldn’t come to these meetings unless they were well prepped,” says Bruce Runciman, executive director at AxiomSL. As a result, he says, “We were able to identify early on some gaps in the rules around liquidity coverage ratio, and were able to get discussion going early between firms and regulators, focus on anomalies, and get them resolved so people could perform LCR calculations more consistantly.”

Some firms have annual training updates around Know Your Customer (KYC) and anti-money laundering (AML) and other “red-flag” regulatory issues, but few have any formal data training, assuming that experienced data staff already have “all the knowledge they need,” sources say.

In other cases, training serves a specific purpose, but does not necessarily have a broad, enterprise-wide application. “I got into providing training because every time I worked on a data warehouse project, I would have to link up different systems and databases, and inevitably I would need to put together a team ranging from 10 to 20 people to do that… and if I couldn’t find a functional, knowledgeable team, time was wasted turning people into viable architects. Without that, they would produce poor specs. So for me, it was a simple efficiency gain: If I didn’t do it, all of my time would be spent coaching people and sorting out things they’d done wrong,” says Dennis Slattery, chief executive of data governance consultancy EDMWorks, which offers training programs in data management that focus half on business issues and half on operations so both sides understand each other’s needs and can work together. “Then clients saw what we were doing and asked us to create a common syllabus… and out of that came a certification program.”

However, with few formal programs in place, and many of the experienced data professionals nearing retirement, there will be fewer data experts for the next generation of data staff to learn from. Gavin Kaimowitz, head of the data practice at Sapient Consulting, notes that the millennial generation will face even greater data, regulatory and change management challenges than their predecessors.

Programs like FIA and Atkin’s initiative go some way to meet this requirement, but are voluntary, and dependent on firms dedicating a budget to data training—when many firms’ management may not even acknowledge that a need exists. Therefore, there has to also be a mandatory element of training.

“When you get go to work for any big bank, there is a whole process of compliance training that everybody takes—but it doesn’t necessarily include market data compliance training, which is surprising given how ubiquitous data is, and how much of an expens it is,” says Barry Raskin, managing director of market data services at consultancy Jordan & Jordan, which provides a market data training module for customers of its data reporting service.

Likewise, Sapient provides training as part of any client data governance initiative. “It’s a big part of… affecting the data culture of any organization,” Kaimowitz says. “You have to understand the costs and liabilities that you’re exposed to. I’ve seen people fired because they shared information they weren’t supposed to.”

But the practitioner-level experience must come from practice, he says. And even the best training course can’t teach some of the best attributes of a data management professional, including the right mindset to appreciate the subject, Johnson adds. 

“One of the big difficulties is finding people who want to do this as a chosen career path. When someone enters a career in financial services, this… is rarely something they would do as a starting point. It’s sometimes better to have done something else first, so you know about the rest of the business,” he says. “I think what will draw people to this is if they see a track record of people moving from data roles into running organizations. But financial institutions are different from vendors: Because we’re using data, not selling it, it can be harder to demonstrate one’s value. And people charged with managing or reducing costs—as opposed to being responsible for growth—may not be the people who end up running business lines.”

If that career path emerges, data management may become a career destination, and training would become more in demand.

“Slowly but surely, FIA is becoming more recognized by managers hiring people as a basic metric of their knowledge… and as a desired—if not essential—qualification,” says David Anderson, program director at FISD. “But the overall objective is to raise the knowledge level of people working in the industry.”

However, while FISD has judged the FIA to be a success, with more than 1,100 people now having passed the exam, convincing people of the benefits has proved harder than FISD originally envisaged.

“There has been almost a generational shift in our industry. We’re very happy with the number of people taking the FIA. But we had expected more,” Anderson says. “I think our industry has not fully bounced back. It has adapted, but those ongoing cutbacks have an impact, and those left behind are so hard at work at their desks that they have little time to go to events or training courses. Yet investments themselves are now much more complicated.”

And even some of the ardent supporters of training and certification in principle still aren’t entirely sold on its value—yet. “When hiring, I generally look for talent over experience. To that end, training is a supporting—but not critical—factor,” says Ed Flynn, executive director at Morgan Stanley, though he adds that “the adoption of certification has the opportunity to become increasingly important in hiring decisions in that it demonstrates a core base knowledge set.”

“Most of the people who take my FIA class find it useful. They come away understanding the industry in ways that they didn’t before. Even people with experience may not have had broad exposure to other areas,” says R. “Tee” Williams, principal of Tee Williams Associates, a consultancy and training company, though he warns that the economics of specialist subjects may not support a wide range of training providers. “We’re in a relatively small industry… with a limited pool of potential customers. As a result, anyone who wants to do training for a living gravitates to the shallow end of the content pond,” he says, adding that the potential pool of paying customers gets smaller as the subjects become more specialized and niche.

The Next Generation

Flynn says he hopes the FIA Level 2 will increase the focus on licensing issues among consumers and developers who interact with data but may not be directly aware of license policies, so that vendors can be more confident that use of their data will be compliant, and data users understand the terms of use, so there is a lower likelihood of accidental misuse of data. 

“At Morgan Stanley, we’re exploring ideas such as a data licensing certification program—the same way that we have a KYC program—where users and developers must sign off that they understand the usage limitations of data. It’s something we believe there is a need for,” Flynn says.

Other firms, though, have begun making some degree of data education part of the induction process for new staff. Just as new hires sign an IT policy agreement to ensure they don’t expose their company to undue risks—from information leakage to hacking and reputational risk—some firms are making them commit to complying with data agreements to ensure they don’t expose their firm to potentially expensive license breaches and incur penalty charges for misuse or under-reporting.

“We have a section in our procedures around data… but it has to be a fairly basic set of principles and practices because data is always changing,” Johnson says. “For most people in business roles, data is a small but important part of what they do, and there is only a very narrow portion of people who do this as their primary role. But this is definitely on firms’ agendas in terms of continuous training…. I think in any well-run organization, this is understood by management.”

And whether in a structured classroom environment, or merely through observing the world around them, data professionals must be able to take time to learn about their industry on a continual basis. “Market data managers do their firms a disservice if they are not aware of the services offered by the providers they use—and more importantly, the providers they don’t use… because they may be missing an opportunity to learn about something they may not be aware of,” Flynn says.

However, it’s possible that the potential client base for training may change over time. With banks offshoring many core data processing roles to lower-cost locations in favor of data scientist positions in the main market centers alongside their trading operations, standardized training and certification programs may be most valuable to staff in overseas locations and third-party service providers. “We will probably see demand for these courses in offshore centers. If these qualifications become a global standard, that would be a fine thing. I see it as a key part of the industry’s maturity… and it should be just like any other part of the business,” Johnson says.

“Once the business side understands the value of data harmonization and quality, it helps them do their business, and they’ll want to do the training. It makes you smart, and it helps you do your job—even if your job isn’t managing data,” says EDM Council’s Atkin.

With more complex traded instruments, greater data challenges and more vendor offerings to understand than ever before, a commitment to lifelong learning must become a requirement for data professionals. As such, formal training and certification programs are set to become more prevalent and more valuable: not just for the individuals themselves and their employers, but—like a driving test—by creating standards to ensure that everyone navigating the long road of data management is driving on the correct side.