Data-as-a-Service: The Do’s and Don’ts

Data-as-a-Service ("DaaS") is emerging as the preferred sourcing model for data management capabilities, but is it the panacea some hold it to be?

The Burgeoning Space of DaaS

DaaS is emerging as a preferred way to source data management capabilities. Data-as-a-Service is a combination of traditional data management platform capabilities offered as a SaaS platform, with operational tasks to secure a timely supply of quality data. Over and above hosting and IT operations, the operational tasks in DaaS typically include data cleansing, issue remediation, contact with data providers or ultimate sources such as issuers, reporting/dashboards, and improvement cycles to finetune data quality and other business rules. DaaS offerings can be a very effective path for financial services firms to quickly onboard new data, connect new applications, service new use cases, put operations on a solid data foundation and lower the overall cost of change.

DaaS solutions sit somewhere in between full back-office outsourcing and buying SaaS offerings and can be thought of as the next logical step after managed services. But where do DaaS offerings work and where are they less applicable? What to keep in-house and where to rely on the wisdom of the crowd and benefit from the economies of scale solution providers can achieve through processing commonly used data sets.

DaaS offerings can be very helpful as foundational, modular building blocks to facilitate and derisk the transition of infrastructure to the cloud, but they are not a panacea. In some areas and data domains, DaaS offerings make a lot of sense, in other cases, they may be less helpful. We will discuss the ins and outs and end with a recent case study where Gresham delivered a corporate actions DaaS solution to a large index provider.

DaaS as an Enabler for Cloud Transition

Digital transformation and the adoption of the cloud are high on the agenda for financial services firms as they seek to benefit from the flexibility in resource provisioning that cloud infrastructure provides. In transitioning their current application landscape, firms encounter multiple hurdles. Especially reference data is often stored in legacy database technologies or buried deep in business applications. Data issues can often hinder and complicate transitions to the cloud and data quality issues can render the best business applications in the world ineffective.

If business applications are the body or backbone of an organization, then data is certainly the lifeblood. Applications simply work a lot better if serviced with a consistent reliable source of master data. DaaS solutions decouple the provision of standard sets of security master, ESG, corporate actions or pricing data from business applications. They can provide data in streaming or batch delivery, shaped in different formats to speed up last-mile integration. They can publish directly into cloud data warehouses such as Snowflake or Redshift.

DaaS providers such as Gresham can provide an à la carte menu of data sources, data domains and delivery methods to conform to a firm’s application landscape. Especially in data management, the devil is in the detail and modular services that are published directly to the cloud take away a substantial part of the cloud transition effort allowing firms to focus on their business applications and workflows.

Where to use DaaS Solutions and Where Not

But where does adopting DaaS solutions make sense and where would it be less applicable? Using DaaS solutions in financial services can be an incredibly effective way to unlock the potential of data and most effectively supply applications and employees. However, there are some scenarios where it is best to proceed with caution. When dealing with proprietary data and logic or when change cycles are unpredictable and need to happen quickly, a DaaS solution might not be your best choice.

However, DaaS solutions can be very beneficial when dealing with non-proprietary data, especially if it is an industry-wide problem or something used by multiple departments. Examples of this include security master, corporate actions, EOD market data, time series/historical market data and ESG information.

The key takeaway? DaaS solutions can bring about lower costs of change provide a transparent data supply for financial services companies and be a catalyst for effective cloud transformation. Therefore, it’s the perfect choice for non-proprietary data that is used across departments and for data sets that are common across the industry.

The Gresham Advantage

Gresham’s approach to DaaS is that of a menu of options: offering firms a configurable mix of data providers, data domains, integration methods and business rules to cater to their requirements. Gresham looks after hosting and application management, as well as data operations including data cleansing, quality management and remediation such as contact with the data providers. On top of the data sets, Gresham’s PrimeEDM user interface provides complete transparency as to the processing status of data sets, the lineage of data, data quality dashboards and different self-serve options. With Gresham’s Data-as-a-Service, your company will be well-positioned to build their operations on quality and consistent data. Take advantage of it today!