Of course it makes sense, but trading systems each have their own product codes, there are various in-house product classification and categorization schemes that have evolved over time, financial data vendors have proprietary product codes and ISDA, ESMA and ISO each provide industry standard classifications too. That’s the starting point for most banks when looking to improve transaction and risk reporting with the help of a financial product taxonomy solution.
The challenge of a workable product taxonomy across the bank is increasingly coming to the attention of Chief Data Officers. It’s critical, from the perspectives of regulatory reporting and management information, to be able to categorize everything that has been sold or traded by the bank in any given period. The challenges include myriad levels of granularity and hierarchies that exist among the many product classification and code schemes in use. The essential requirement is that the financial product taxonomy solution is able to identify and make visible the unique attribute by which it can be categorized.
Post-trade product stamping, i.e. assigning a product classification for straight through processing in transaction reporting and risk management, is a key use case and often the litmus test of a good financial product taxonomy solution. Doing business faster, because product onboarding is completed quicker, is the key commercial benefit from a practical product taxonomy.
All non-GoldenSource systems can access the standardized product codes via the product taxonomy and product stamping service made possible by GoldenSource Product Master, which means that accurate product information is always available across all business systems to support product-related processes.