Defining IBOR at TSAM

Mal Cullen, Head of the Americas and Eagle ACCESS℠


Last week I had the privilege of sitting on a panel discussion at the 2014 TSAM New York conference.

The theme of the panel was the Investment Book of Record (IBOR), a subject I have written about on this blog before. IBOR is one of the hottest topics in the financial industry and something many firms are looking to implement as they recognize the business benefits it can bring.

It was evident, based on the conversations from the panel and questions from the audience, that firms are struggling with both the degree of accuracy needed for the various data points needed in an IBOR and the justification for an ROI to improve top line revenue. This makes it challenging for firms to justify the major project expenditure typically associated with an IBOR initiative.

An IBOR project should start by looking at what the business goals are – recognizing the data management element in the process – and remain focused on those goals when working on the delivery; rather than trying to build the text-book definition of an IBOR. After the panel, Jeremy Hurwitz of InvestTech Systems presented their model that helps firms define the timeliness of various data and how to align that with the level of detail required. It’s an approach that echoes the same principles as Eagle’s data-centric approach to solving IBOR challenges.

As I stated at TSAM, the complexity firms face today with global expansion, increasingly complex asset classes and multiple front-office systems, all point to the need to develop an IBOR and provide better data for the firm. That said, there is no interest among firms in large, expensive conversions of core systems purely to achieve better data. As the timeliness of the IBOR data increases, the level of investment is highly likely to increase also; however, firms do not need to make large, unjustified investments. Rather they should partner with a solution provider that offers the flexibility to increase the timeliness and level of accuracy as business needs dictate. This approach provides the needed flexibility and addresses questions around ROI, while ensuring the firm is making quality investment governance for their IBOR projects.

What is clear is that, at its core, IBOR is a data management issue. Its successful implementation relies on firms taking a long-term view and looking at it as a strategic data governance decision. By taking this data-centric approach, firms are able to get a single, consolidated view of all their assets that will ultimately support better decision-making and help create operational efficiencies.

IBOR shouldn’t be regarded as the final destination, rather as a point in a much bigger migration towards the improved timeliness and accuracy of data delivery on an enterprise-wide basis. The impact and benefit of this to buy-side firms is more far-reaching than the creation of an IBOR alone and is an opportunity not to be missed.

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