Gregory Maciag: Barcodes of Finance

Thursday, 04 February 2016

Barcodes of Finance

Let's hear it for three little acronyms that are set to bring straight-through processing (finally) to the finance industry. They are: LEI (legal entity identifier), UPI (unique product identifier), and UTI (unique transaction identifier). Fans of abstraction will notice these are identifiers for the three core entities that turn up in every business: party, product, and transaction.

A progress update on the uptake of these identifiers by Allan Grody of Financial InterGroup is frank and instructive. There are more acronyms to negotiate, but I take two key points from this useful report. First, I note the impetus for standardization is coming largely from regulators even though financial institutions stand to make great gains in understanding their risk exposures.

Second, I appreciate the small but significant point about difficulties implementing the LEI. The LEI is 20 characters – too long for many legacy systems. It could easily be halved and still have all the coverage and longevity it needs. This looks like it was a miss-step – but kudos to Grody for exploring the issue. Human beings aren't perfect and we learn from our mistakes.

I want to add that “barcodes of finance” is a great phrase. Grody and his colleagues are to be congratulated for creating an image with great power and resonance. This is a great way of encapsulating the nature, universality, and value of standardized identifiers for a general audience. TABB

Posted on Thursday, 04 February 2016 | Permalink

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New Book

My latest book presents the challenges members face when adopting industry standards as well as the opportunities that come as a result. It features my discussions with many people over many years and follows the foundation I set in my first book "The Business Information Revolution".

Industry standards are never adopted in a vacuum. They become part and parcel of all the trials and tribulations managers face in their day to day work. ACORD Standards are always part of a larger software development project that brings along people, priorities and politics. Adopting industry standards isn't simple, but the benefits far outweigh the problems of building and maintaining proprietary alternatives.

I trust that you will appreciate my frankness, identify with some of the challenges and learn from what others have done to pave the way.