In this second installment of our series, FTF News focuses on the new data management infrastructure that J.P. Morgan has deployed for its Worldwide Securities Services unit.
A key component of the new IT infrastructure behind J.P. Morgan’s Worldwide Securities Services (WSS) is an enterprise-wide data management infrastructure that will help WSS better use the data that is the lifeblood of its offerings, says Richard Anfang, managing director, chief information officer (CIO) for J.P. Morgan’s WSS group.
The WSS group is a securities servicing provider for institutional investors, alternative asset managers, broker/dealers and equity issuers. Its wide range of services include offerings for commercial paper, international clearing, settlement and custody, collateral management for cash, derivatives and securities, compliance reporting, fund accounting and administration, private equity, real estate and securities lending.
Richard Anfang,
managing director, CIO,
J.P. Morgan WSS
Enterprise-wide, data management strategies are in vogue because many industry pundits are talking about the need for “Big Data,” which refers to managing and analyzing large datasets. Once firms can better utilize these large datasets they will be more competitive and can improve productivity, according to pundits. Yet Big Data comes at a big price.
“Most firms tend not to invest in this because it becomes daunting,” Anfang says. “J.P. Morgan has spent several million dollars over the last few years putting an enterprise data management infrastructure in place, and it’s fully up and running.”
An Enterprise Data Repository
The WSS’s data infrastructure has been dubbed an enterprise data repository, and it includes metadata dictionaries, Anfang says.
“In its most basic form, this is a technology to manage all your information assets—databases that process information flows,” Anfang says. “We use some third-party software and we have developed some software ourselves to create an application that captures all the information and the processing that we have. As a result, we’ve found a tremendous amount of leverage. We’re using it to automate content generation for our clients. We’re also using it to solve production problems in a more rapid fashion.”
J.P. Morgan has applied the Agile methodologies to its internal software development efforts for the past 18 months. The conventional software development approach requires lots of communication—business requirements, high-level, detailed design documents and so on—and was wearing thin. Agile has helped WSS improve its time to market by 30 percent and reduce costs also by 30 percent. The swifter development time frames are a direct result of developers, business analysts and end users working in a more collaborative, iterative fashion via the Agile philosophy.
“Most firms tend not to invest in this because it becomes daunting. J.P. Morgan has spent several million dollars over the last few years putting an enterprise data management infrastructure in place, and it’s fully up and running.”
—Richard Anfang, managing director, CIO for J.P. Morgan’s Worldwide Securities Services (WSS)
Anfang and company have also been using the Lean Six Sigma management philosophy for re-engineering—which stresses squeezing the waste from processes and improving processing speeds by producing results that more closely match the customers’ definition of quality.
Applying the Agile and Lean methodologies to its enterprise-wide data management infrastructure is also breaking down barriers and unlocking key data within WSS business units and minds.
“More often than not, information is locked in peoples’ minds or maintained in spreadsheets,” Anfang says. “The information is soon out of date. We believe there’s a great deal of value to investing in infrastructure that allows you to manage data in a more robust fashion.”
Uniting data flows among the asset management, custody, prime brokerage and other business units within WSS is “a huge effort,” says Lyn Marcrum, a senior analyst with market research firm Aite Group. Marcrum, who focuses on operational trends and technologies for the buy side, was formerly a consultant that landed assignments with various WSS units. Now that the new data infrastructure is in place, “it’s a tremendous internal success that is really going to prepare customers better for the regulatory disclosures that everyone will have to face,” Marcrum says.
Sharing Experiences Locally and Globally
J.P. Morgan’s customers and others may need to do more than set up a new infrastructure for managing data across the firm, according to enterprise data management provider Goldensource, which surveyed its customers this past April and May and presented its findings in time for last week’s SIFMA Tech Leaders Forum and Expo in New York.
The survey results stress that banks and securities firms are likely consider a new governance structure that includes the positions of chief data officer (CDO) and data steward in order to usher in centralized data management operations. The CDOs and data stewards are operational posts and not intended to be IT management positions, say Goldensource officials.
“In Sydney, we’re enhancing the accounting engine for the needs of that region and surrounding it with our global, client-facing toolset so that we provide a fully integrated experience to our global clients.”
—Sarah Gill, managing director, global platforms executive for J.P. Morgan’s Worldwide Securities Services (WSS)
Another key component of this new governance would be a steering committee structure around each dataset that would prioritize decision-making and communication about data needs, and would include the concerns of business units and data consumers, according to the Goldensource survey.
“We’ve seen some firms try to establish their own enterprise data management program,” Anfang says. “For one such client, we shared our experience so they could leverage our knowledge base to their benefit.”
While WSS is unlikely to send internal staff to help clients with their enterprise data management strategies, the unit is willing to share the tools, software and the methodologies it has applied to its offerings—all of which represents major investments. The price-tag for third-party offerings is several million annually, Anfang says. “In addition, I would say it’s multiples of that with the software that we’ve written and the process we put around it,” he says. “The return on investment (ROI) is more than 2 to 1, and it’s only going to get bigger.”
Sarah Gill,
managing director, global platforms executive,
J.P. Morgan WSS
Beyond the favorable ROIs, the IT infrastructure work has enabled WSS to take several steps forward in the globalization of its products and services, explains Sarah Gill, managing director, global platforms executive for WSS. Gill, who has been working in conjunction with Anfang, says WSS is wrapping common technology around securities services that are specific to a region or country. These supporting IT capabilities can then be leveraged by J.P. Morgan’s client base across the globe.
“What we’re trying to do is achieve the best balance between local solutions, which are pertinent to that marketplace, and global offerings that can be used by everyone,” Gill says. “For example, in Sydney, we’re enhancing the accounting engine for the needs of that region and surrounding it with our global, client-facing toolset so that we provide a fully integrated experience to our global clients.”
Gill adds that the industry should watch this space as WSS officials intend to roll out further extensions of the globalization effort over the coming months. “This is really just the start,” she says.
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