Saturday, June 27, 2009

Who's Got the Entity Data Standard?

It's been an interesting month with many articles and editorials in publications such as Reference Data Review, Inside Reference Data, Global Investment Technology and Securities Industry News to name a few all raising the issue of standards in the business entity data space. There is no shortage of contenders. SIIA is pushing IGI (Issuer, Guarantor ID). SWIFT is considering a role by expanding BIC coverage and addressing the non-uniqueness of the BIC. Factset has made past announcements of their intention to make a public standard available. Other major data vendors such as Bloomberg, ThomsonReuters and D&B already have broad coverage. The European Central Bank is working on a data utility. So is Financial Intergroup's Allan Grody. And so is the Dubai International Financial Centre (DIFC). Avox has an initiative S&P called the CABRE (Cusip, Avox Business Reference Entity). We've also recently launched a free business entity directory ( And of course there are the industry working groups including the EDM Council, JWG-IT and FISD all talking about standards.

This is all looking pretty positive, isn't it??? (NOT!!!).

Let's be honest here. Every commercial firm in this space would love to own the global standard for business entity identification. Think about it. The entire planet "theoretically" would have to pay you and only you for the right to get an authoritative picture of a business entity. Just think of the monopoly play here. Millions of customers needing millions of pieces of information every day. One year's profit would pay off the US national debt.

At least that's what many buyers of such information believe. It's not quite that profitable a picture. Here's why.

There can never be a monopoly provider of this data. The function that all of the above mentioned firms play is that of data aggregator. Some firms use automated matching to provide a consolidated picture, some use manual analysis and all the others a combination of both. The sources we go to are the same that anybody can go to directly.

The sources used typically include national and state business registries, regulatory authorities and tax authorities. All these organizations have an obligation to make information available to the public (although some of them have decided to put a rather hefty price tag on some important data). Some data is not publicly available and various vendors have secured rights to it but by an large, nobody had universal access to everything (the Google guys are trying...).

So where is all this spaghetti going to get us? In my opinion, it's going to get us to where you want to go. Competitive forces are pushing all vendors to be more innovative, cost effective and customer focused. A perfect world in the Avox view is one where everyone works off of the same underlying basic content that uniquely identifies a business entity. The ID becomes a secondary issue but remains important of course.

Some vendors are working to this objective. You won't be shocked to hear that Avox is one of them however a number of firms we have spoken to are also "chilling out" with respect to relinquishing value of the basic data.

Please believe me when I say that Avox does not expect to be able to solve the whole problem on our own when it comes to business entity identification. We can't. But we can help facilitate a quicker convergence onto a standard by being open and "influencing" other firms to be open.

If you buy into this view, let your vendor partners know. The sooner we connect, the sooner you can connect and that's when everyone can get on with the business of efficiently generating returns for customers.

Your Data Geek,


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