Data aggregation and the extraction of information from it is as much a about management as it is about technology, says John Van Verre, managing director at HSBC Securities Services in Hong Kong and global head of its custody business.
Data integration and the use of APIs to help clients access it is at the heart of the bank’s tech strategy. “The problem is silos of data,” Van Verre said.
The same transaction, involving the same client in the same market, requires information be passed among asset managers, brokers, custodians, administrators, fund registrars, stock exchanges, central counterparties and clearing houses.
“It’s all vertical: they all have their own data models, their own standards, their own reference data,” Van Verre explained. “The same piece of data can be interpreted differently.”
The same piece of data can be interpreted differently”
This lack of consistency is what the bank’s digital development team is trying to address.
“Clients want data efficiency, as much as processing efficiency,” said Janice Ku, senior product manager for digital and data at HSBC Securities Services. “They use multiple service providers, so the question is how to aggregate all of their information so we can generate additional value.”
But Van Verre says technology by itself isn’t going to meet the challenge. “Technology alone can’t solve this,” he said. “It can accelerate and facilitate an answer, by forcing people to converge on a common approach. But all of us are operating on the back of 30, even 40 years of legacy systems and processes.”
From this perspective, he sees risk not from a fintech startup with better solutions, but from a bank losing touch with industry norms. “The question is: on what basis would a competitor drive that standardization?”
Clients want data efficiency”
The real risk to the business, he says, is about a bank’s ability to change the old model quickly enough to support new demands by clients. “Ignoring the trend is the risk,” he said.