The Challenge

In early 2010, a leading global investment bank faced a common but costly challenge: the proliferation of reference data platforms. Over decades of growth and acquisitions, the bank had accumulated four separate reference data systems, each maintaining its own vendor feeds, processing logic, and downstream distributions. This fragmentation led to excessive costs, data inconsistencies, and operational inefficiencies that impacted the entire organization.

The bank’s technology leadership engaged our team to analyze the current state and build a business case for consolidation. The stakes were high - these platforms served over 200 downstream applications across trading, risk management, and operations functions, processing millions of securities daily from premium data vendors including Bloomberg, Reuters, and Markit.

Initial Assessment

Our initial discovery phase revealed the true scope of the redundancy. Each platform maintained separate subscriptions to similar data sets, resulting in multiple payments for the same securities. Bloomberg alone was charging per-security fees across four different platforms, with significant overlap in coverage. The bank was essentially paying four times for core reference data on major securities.

The technical landscape was equally concerning. Each platform operated its own ETL processes, maintained separate business rules, and required dedicated support teams. This redundancy not only increased operational costs but also created data inconsistencies that required constant reconciliation.

Deep Dive Analysis

Through March and April 2012, we conducted a comprehensive analysis of the existing platforms. Key findings included:

The bank maintained over 8 million securities across all its data platforms, with approximately 60% overlap. Each platform processed daily updates, data quality checks and largely to the same set of securities. Support costs for maintaining four separate platforms exceeded $50 million annually. Data inconsistencies between these 4 different were causing an average of 40 production incidents monthly, including some high profile trading errors around M&A, IPO’s where as an example new ticker symbol not available to trade, causing lost order flow from clients amidst order rejections that took extensive manual fixes in several related systems.

SWOT Analysis

Our detailed SWOT analysis revealed several critical insights:

Strengths

The existing platforms were stable and well-understood by their respective teams. Each system had developed specialized business rules for specific asset classes. Integration with downstream systems was mature and tested.

Weaknesses

Redundant vendor subscriptions were driving up costs unnecessarily. Multiple ETL processes increased operational complexity and risk. Inconsistent business rules led to data quality issues. Support costs were artificially high due to platform duplication.

Opportunities

Vendor consolidation could yield significant subscription savings. Unified business rules would improve data consistency. Streamlined architecture would reduce operational costs. Modern technology stack could improve performance and flexibility.

Threats

Complex migration could risk business disruption. Specialized business rules needed careful preservation. Change management across 200+ applications required careful coordination.

The Business Case

By May 2012, we had constructed a compelling business case for consolidation. The proposed strategic reference data platform would deliver:

Cost Savings

Immediate savings of $8.4 million annually through vendor subscription consolidation. Operational cost reduction of $6.2 million from simplified architecture and support. Infrastructure savings of $2.1 million from reduced hardware and software needs.

Operational Benefits

75% reduction in data inconsistency incidents. Streamlined governance and control framework. Simplified disaster recovery and business continuity. Enhanced data quality through unified business rules.

Strategic Advantages

Future-ready architecture supporting business growth. Improved time-to-market for new products. Enhanced data governance capabilities. Reduced vendor dependency through flexible architecture.

Implementation Roadmap

We developed a phased implementation approach spanning 18 months:

Phase 1 (Months 1-6): Build core platform and migrate first asset class. Phase 2 (Months 7-12): Migrate remaining asset classes and critical applications. Phase 3 (Months 13-18): Complete application migrations and decommission legacy platforms.

Risk Mitigation

The business case included comprehensive risk mitigation strategies:

Parallel running periods to ensure data consistency. Phased migration approach to minimize business impact. Detailed testing strategies for each migration phase. Clear rollback procedures for each implementation step.

Expected Outcomes

The business case projected several key outcomes:

Financial Impact

Total cost savings of $16.7 million annually once fully implemented. ROI achievement within 24 months of project completion. Reduced ongoing maintenance costs by 65%.

Operational Improvements

90% reduction in data inconsistencies. 50% faster onboarding of new securities. 70% reduction in production incidents. Streamlined vendor management process.

Project Approval and Success

The business case received executive approval in late September 2012, with an initial funding allocation of $24 million for the transformation program. The projected three-year ROI of 180% made it one of the most compelling technology investments in the bank’s portfolio.

Looking Forward

The strategic reference data platform initiative has become a model for similar transformation projects within the bank. The methodology used for building the business case, particularly the detailed vendor cost analysis and operational impact assessment, has been adopted as a standard approach for large-scale technology investments.

This eengagement demonstrated that even in complex, mission-critical areas like reference data management, significant efficiency gains are possible through careful analysis and strategic consolidation. The key lies in building a comprehensive business case that addresses both immediate cost savings and long-term strategic benefits.