September 26, 2017 – By Max Bowie
It’s often said that one doesn’t go to school or university to study market data. And indeed, the typical market or reference data professional tends to start out in another area of the business and wind up in data, rather than starting out there and carving out a career in this niche. But this is starting to change, with some organizations offering formal education, training and certification programs on data topics for existing data practitioners and data consumers alike.
One of the drivers of change has been industry association FISD’s Financial Information Associate (FIA) certification program, which validates a candidate’s existing knowledge, and which has resulted in professional trainers creating a number of structured training courses around market and reference data issues to prepare candidates for the FIA exam—a 100-question multiple choice paper.
The FIA exam has been around since 2013, but FISD has just completed the first in a series of planned “Level 2” certifications focusing in greater depth on specific areas—the first of which covers data licensing issues.
A fresh driver gives the lie to the idea that you never study data before joining the industry:
Mike Atkin, managing director of industry body the EDM Council—which already offers its own DCAM(Data Management Capability Model) certification—recently taught a module on data management at Columbia University in New York for students of finance and advanced analytics topics, who could benefit from understanding the legal issues governing the underlying data that is critical to their applications.
Though the course was not limited to data management in finance, Atkin says data management is a portable skill. And though the students had not dealt with data before, “they were very much attuned to recognizing data as a business asset. They understood data concepts such as representation, lineage, data quality, and central data attributes… and by the end of the course, they were qualified to respect the data… and understood that if you can’t trust your data, how can you trust your analytics?” he says. As a result, other academic institutions are now approaching Atkin about creating courses for them.
But until now, little formal training has existed. When Andrew Miller, managing director of consultancy Net Effect, who did the legwork of developing FISD’s latest program, entered the industry, training was a matter of absorbing the information that you worked with. To learn a subject in detail, you had to work on “deep and narrow” projects until you became a specialist. Miller was sent on an external course about financial markets and instruments, but it didn’t cover data.
The problem with learning in this manner is that you don’t know what you don’t know, and you don’t learn about areas that you haven’t been directly exposed to. “There’s a tendency for people who think they are experts to go on what they learned rather than how something is now. It’s not easy to stay up to date with all the licensing changes across more than 150 exchanges, as well as other trading venues, and vendors. So training is increasingly becoming a good idea—not just for consumers of data, but for anyone involved in the data lifecycle, and particularly developers,” Miller says.
Key to this is the realization that such a large proportion of people who work in the capital markets will encounter market data as part of their job, so few of whom fully understand its cost and the risks associated with not treating it correctly, and even fewer work in roles dedicated to managing it.
“To be effective in a role, you have to marry that with what the business is trying to achieve: It’s about being competent in data management, but also being able to add value to the business. So… it’s really a specialist subject, and training is very important to reinforce what you know and to demonstrate your abilities, and has been a missing ingredient in the career path for data management professionals,” says Chris Johnson, senior product manager for market data at HSBC Securities Services.
Johnson, who was inducted into the Inside Market Data Hall of Fame earlier this year for his efforts to educate others across the industry about the data management aspects of upcoming regulations, says his work on the speaker circuit is as much about learning as it is about teaching others. “I discovered that the more you speak, the more you learn, and the more that people speak to you and give you feedback—so it’s a means to an end. It’s not just about educating; it’s about learning and realizing that things can be made better… and that this feeds into things that we do as a business,” he says.
Another driver for more structured training is the creation of new, regulated positions within firms that relate heavily to data—such as data protection officers, a role mandated for all companies in Europe under the General Data Protection Regulation, but which has not existed before, making it hard to find candidates with the right skillsets.
“Generally, tier-one firms are converting internal people into this role, such as chief data officers or chief technology officer-type positions, or someone from legal and compliance. They’ll need additional training and staff… to set up a structure of people with different skillsets,” says Stuart Tarmy, vice president of sales and business development at smart data discovery technology vendor Io-Tahoe, adding that some of these skills go beyond what can be learned in a classroom. “In this first wave, firms may have to pick their CDO by default. By the next generation, there will be more people with specific skills. Even someone coming from a data background will still need to learn how to deal with government agencies.”
Yet another driver is the argument that a rising tide raises all boats: that the more educated the industry is about data, the greater the likelihood that deals will be easier to negotiate, will suit the client better, and deliver a more productive long-term relationship for the vendor.
“The best salespeople I’ve ever met have extensive qualifications, and can talk at a very detailed level with very high-level people,” Miller says.
So far, it has been regulation-driven issues that have commanded firms’ training budgets, over and above data management. One initiative that straddles both is AxiomSL’s recently launched regulatory education program, which comprises three tiers: “In the Know” briefs that summarize important regulatory change issues into consumable sound-bites; an “Explainer” series that clarifies regulatory terms in plain English, highlighting what user firms must know to be compliant; and a “COO Supper Club,” that allows senior finance and operational executives to meet on “neutral ground” to exchange ideas.
“The level of people we pitch this at… typically have a very good grasp of the issues. They wouldn’t come to these meetings unless they were well prepped,” says Bruce Runciman, executive director at AxiomSL. As a result, he says, “We were able to identify early on some gaps in the rules around liquidity coverage ratio, and were able to get discussion going early between firms and regulators, focus on anomalies, and get them resolved so people could perform LCR calculations more consistently.”
A version of this article first appeared in Inside Market Data.