Tine Thoresen: How the Other Half Live
![tine-thoresen-2 tine-thoresen-2](/sites/default/files/styles/landscape_750_463/public/import/IMG/687/101687/tine-thoresen-2-580x358.jpg.webp?itok=sWIwmACF)
In the UK, there is a documentary series called How the Other Half Live. It’s a simple premise: A wealthy family meets a poor family and the viewer gets to see the often dramatic differences between the two, especially when it comes to their respective living conditions. In the data management world, there are similar drastic differences that are becoming a lot more apparent these days. The firms that have robust data governance and systems can more easily adapt to the growing array of regulatory requirements being pushed out.
The latest example now being discussed is one that has not even happened yet. It is the potential introduction of a universal business entity identifier.
If asked whether now is the time to warn IT that there might be a new field that needs to be added and mapped to, some would say “yes.” According to a panel of speakers at the International Securities Association for Institutional Trade Communication (ISITC) Europe conference held in London on November 11, the much-discussed universal business entity identifier is soon to be announced.
But since the market has moved into waiting-for-news mode, the identification discussions have also taken a new direction. It is now about the potential implications and operational requirements that need to be met. If regulators take a hard line, they could force firms to use the chosen identifier for transaction-reporting purposes. This is what many standardization supporters hope will happen—at least those that have their houses in order.
Straightforward
For those that have mature data management capabilities, it can, in fact, be straightforward to add a new identifier. It is those in the other half who will struggle. Firms with strong data management systems and processes, which include most top financial institutions, can add the field to their golden copy record feeding data to other systems. Firms not operating with a golden copy may now realize why this would have been a useful function to have already developed. It is in situations like these that the differences become more apparent.
The identification scheme itself will also have to be fair. If it becomes a regulatory requirement to use it, the identifier will have to cover all entities firms have in their systems. It cannot only meet the needs of specific countries or regions. The market also needs to have confidence in the fact that the data is accurate, and that changes are communicated in a timely manner. The operational model sitting behind the standard has to take into account that all market participants must receive these changes at the same time. There cannot be a situation where one bank gets news about a changed identifier following a company merger hours later than the rest of the market.
It all comes back to sound data management practices. There is now perhaps a better case than ever to invest in enterprise data management activities—on both sides of the table. In a recent poll carried out at the ISITC Europe conference, 68 percent of delegates said a globally acceptable business entity identifier is achievable in two to five years. A few years back, the result would most likely have been quite different. The only sticking point that could impede this development now seems to be poor data management. Regulators, standards bodies and firms alike all need to ensure their data management strategies are up to the challenge.
A universal business entity identifier may well become a reality at some point. And if it does, the differences will have to be accounted for or evened out for the market to get to where we want to be.
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