ABOR, IBOR, MBOR, Etc. – BORed With Acronyms?

If you have been keeping up with trends within securities industry operations and technology you have probably encountered the newest growing set of acronyms, all of which revolve around BOR or Book of Records.  These BORing acronyms are just another way of trying to address a question that the industry has been grappling with for many years without success: Is the total position for each security known both across the firm and within each individual account that holds the security?  In other words, do I have transparency to all positions and cash throughout the firm?  This is not just an academic exercise as accurate and timely positions and cash are integral to both the investment management process and to enterprise risk management and compliance.  With market and regulatory changes, increased use of multi-asset strategies, OTC derivatives and other “alternative” investments, achieving accurate and timely information has become more difficult yet more important than ever.

The current proposed answer, IBOR remains a bit of an enigma.   Is IBOR a data management issue, is it a data aggregation issue, is it a technical architecture issue, is it a business process issue, is it an application solution issue?  The answer is all of the above and implementing a solution to aggregated intraday position data requires treating the project as a technical, business, data management and data governance initiative.  For many firms the task simply appears daunting and as a result many firms are biting off pieces of this initiative or orienting initiatives around specific business processes. It might be a band-aid approach, but firms are asking themselves what alternatives they have: Where firms continue to struggle with their approach, a consolidation of all investment assets, is not going to resolve itself or disappear and will only increase in importance at all levels of a firm.  Disparate applications, data sources and a technology stack that represents the historical addition of point solutions took years to create this problem.  Unraveling  a solution won't happen overnight. Therefore putting off a game plan to implement the concept within your own firm because of the uncertainty of cost and benefit will only result in adding the risk that your addresses the issue too late.

Extracted from Financial Technologies Forum Article dated August 28, 2013
Written by Guest Contributor: Philip Sindel, President & CEO, Olmstead Associates, Inc.