RiskTech Forum

New Data Imperative Book Interview - Managing Real-Time Risk in Capital Markets

Posted: 30 June 2009

Raj Nathan, Ifran Khan and Sinan Baskan are the co-authors of the book, the new Data Management: Managing Real-Time Risk in Capital Markets. In this interview, they share their insights and what they have learned from the financial crisis, new government regulations and how your data strategy plays a critical role for managing enterprise-wide risk management. They are hoping that this book will help customers at all levels of the spectrum realize that the kind of technology available and the current solutions from Sybase, if implemented, will measurably improve their ability to have a better grasp on financial risks within their organizations.
Hi. Im Samantha Finnegan with Sybase. I am here with Dr. Raj Nathan, Sybases Chief Marketing Officer, Irfan Kahn, Sybases Chief Technology Officer and Sinan Baskan, Sybases leading technology architect for capital markets. We are here to discuss the release of, The New Data Imperative Managing Real Time Risks in Capital Markets. So gentlemen, why did you feel the need to write this book if when so much has been written about the financial crisis.
Indeed, you know there are quite a few books that have been written about the financial crisis such as why it happened, all the causes for it and so on. But what is not being written about and addressed very well is what an IT technologist could have done, should have done, should be doing and continue to do. And that is what this book addresses.
People often are after a quick guide to be able to get them going. And we wrote the book in a very specific way to try and guide people in a very action-orientated way so they can take on board immediate opportunities and look over the horizon as where to see where they should be heading as an organization as well.
So, how is the New Data Imperative different from other books and what do you mean by New Data Imperative?
Well, the book focuses on how an institution, a financial institution, makes decisions regarding investments and portfolio management and software. This particular crisis is actually a result of a series of decisions made over a decade by many institutions looking at the financial markets information and acting on it. And our premise is that the quality of that data and how it is treated and how it is transformed into information mattered a lot. And that is our focus, that is what our focus is. We wanted to establish a cause and effect relationship between the data, how it is used, and how it is presented and the consequent results of decision making at the institutional level.
So, what key insights did you learn while doing the research and interviewing key players on Wall Street?
Ill say that was the most enjoyable part the research element for this book really gave us a lot of insight. Today, it is really evident that financial services are looking at risk management as much more of a defined business initiative. And also, what we also discovered along the way was that because of the tactical way that applications were either created to solve problems or the manner in which technology was used, it inevitably has created a lot of legacy to manage and also a lot of complexity that also has to be managed along the side. So, really going forward, any opportunity that presents themselves for really resolving this risk management issue that a lot of the financial institutions are finding themselves in, is going to imply that they take on a step-wise methodology. So, initially, for example, establishing a framework as a sheer data repository and then going all the way through to having an event processor where you can actually look at in-flight data and also being able to manage the historical context of the data as well.
How do you see the future of capital markets in terms of regulation?
I think there will be more regulation without a doubt at the national level and, possibly, at the international level. Every government is going to bring in more regulations along the lines of banking structures that they have already put in place. But the more interesting question is are governments going to support and promote the idea of a global regulator. Will there be an institution similar to IMF or World Bank that will have jurisdiction to cover the global operations of financial institutions and enforce regulations at close borders. Thats, I think, more the interesting discussion and I think it will get there or move in that direction fairly quickly.