Enterprise Data Management
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BNY Mellon: Taking the Reputational Risk Out Of Data Management
March 16, 2009
"Asset servicing executives need to understand the basics of data management," says Amy Harkins, Bank of New York Mellon Corp.'s managing director of global corporate events.
When companies the size of Bank of New York and Mellon Financial combine, that becomes particularly imperative. To protect the merged firm's reputation and access to important information, Harkins launched an initiative to make sure that employees understand data licensing agreements.
In summer 2007, when Bank of New York and Mellon Financial began integrating their operations, dozens of executives from the merging firms deliberated over which technology platforms and units to integrate or scrap. Meanwhile, Harkins and her colleague, Matthew McDonnell, now VP of U.S. data management, worked to develop a new strategic approach to market data.
The key component of their plan was the creation of an online education program for the thousands of employees in the newly formed asset servicing division, which is responsible for custody, performance analytics and measurement, as well as other middle- and back-office functions. Harkins and McDonnell had built a much smaller-scale program in 2005 at Mellon, where they were managing director of global asset servicing and head of the office of data management, respectively.
"The goal was to introduce training around market data concepts and data license components," explains Harkins, including the merged organization's licensing redistribution rights for data feeds that are provided by 80 vendors. A well-known advocate for corporate actions automation and standardization, Harkins is also responsible for Bank of New York Mellon's class-action lawsuit notifications and proxy voting, both of which involve adapting corporate action event notices for customers.
While banks and broker-dealers routinely caution staff about following contractual guidelines, few have developed programs as structured as BNY Mellon's, according to data management directors at two large banks who asked not to be identified. Most firms rely on word of mouth, internal memos and sporadic staff meetings. The extent of BNY Mellon's training is also unusual, encompassing securities reference data, market data, corporate actions, index data and pricing data.
Violation Risks
Violating redistribution agreements with data vendors is serious business. Not only is reputational risk at stake, but there are also financial repercussions--firms can be fined or even lose a contract, along with access to the information. Typically, the agreements are priced according to the type of data and how widely it will be distributed; clients of a bank or brokerage tend to sign separate licensing contracts with the vendors. Firms use securities descriptions, corporate action notifications and pricing data to feed their trading, customer reporting, valuations, performance measurement and analytics systems.
The telephone and on-site data training sessions Harkins and McDonnell implemented at Mellon were conducted with fewer than 100 professionals in Everett, Mass., Pittsburgh and London who managed the bank's security master and pricing repositories. After Mellon's merger with Bank of New York, they were faced with several-thousand employees--too many to manage through face-to-face interactions.
They opted to "certify" staffers through Internet-based training--both basic and advanced programs--and were able to leverage Mellon's existing documentation. A 30-minute PowerPoint presentation was delivered through an internal Web site managed by the office of data management (ODM).
The ODM, created in 2005 at Mellon and carried over to the new company, provides guidelines for market data usage for all business units. Its purpose, says McDonnell, is to "serve as a single point of contact for vendor and data management while supplying a consistent data delivery message and proper direction for all BNY Mellon affiliates and joint ventures." All requests for new feeds or expansion of existing contracts must be approved by the ODM, which is overseen by a committee of 42 executives from ten business lines.
