Reference data Systems – Legacy Modernization and Transformation

What is Reference data, in the financial industry?

The Industry Definition of reference data is that foundational data that provides the basis to generate, structure, categorize, or describe business transactions. The Reference data is the basis to view, monitor, analyze and report on transactions.  The below diagram shows that there are five main elements of a financial transaction some of the  

Drivers for Legacy modernization of reference data systems

Reference data systems are critical for a bank or financial institution and are the core asset of the bank. These systems should be adequately managed, governed, enhanced in a systematic fashion. The reference data system impacts all the operational functions of a bank. However when it comes to managing these reference data systems to drive the business; most of the banks/financial institutes are using on old technology stack.

With the continuously changing regulatory requirements, increase physical and information security challenges it has become imperative for the banks to use the twenty-first-century technology ; to simply management of the financial instrument, client and counterparty accounts, market data, historical transactional data information like the settlement instructions, etc. to minimize the risk by reducing the overall complexity

Key Points considered for defining the modernization initiative at any financial institution


  • Decompose monolithic applications into discrete services and process flows by creating componentized applications and services which are agnostic in nature
  • Architect for real-time straight-through-processing prefers to eliminate batch cycles which help in moving the system from EOD process to near real time process
  • Segregation into business services and common services, which would decouple the core business service system with the common services. For example – creating a common module for tax calculation for different types of trades and asset service transactions
  • Provide centralized user access/experience via Securities Workstation, which reduces the complex configuration management systems. Users should be allowed to login into multiple systems using single sign-on
  • Business exceptions should be handled by a standard work-item management layer, having a proper workflow management system with 4 eyes (maker-checker) reducing the operational inefficiencies
  • Data stored in a golden master database, creating a golden copy helps reduce the overall risk associated with the operational workflow and running predictive analytics on top of golden copy database would yield a better result with higher confidence levels


Abhinav Gupta


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