Dave Vellante and Paul Gillin, theCube co-hosts, went live from MITIQ 2013, the Conference dedicated exclusively to Information Quality, talking to Justin Magruder, President and Senior Managing Director at Noetic Partners.

Magruder’s solid background in finance made for a very interesting chat around the issues of decision-making, money-lending and safe investments.

In Magruder’s opinion, “managing financial information is based upon the concept that every party involved in the financing world is important.” The role that parties play in transactions and the relationships parties have with other parties, is fundamental to understanding financial services and the financial markets. “It’s not a new concept, but we’ve taken it to the next level,” explains Magruder. “It’s a process that has helped our clients understand their risks better, make more money and lose less money.”

“Data quality, and more specifically, the lack of data, was a fundamental component of the financial crisis” in the past, said Magruder. Having witnesses a couple of crises himself, Paul Gillin stated that the problem was caused by people lending money beyond their means. Back then credit was too easily available to the wrong people. “Is this a problem that can be addressed by data?” Gillin asked Magruder.

“Without the data we cannot understand the risk that is inherent in lending money to counterparties. Data is the root of the solution. Understanding the parties involved and the relationships between parties is the reference data, the most fundamental piece of banking and investment banking. Understanding that risk and how you are exposed to all the parties involved will make and break the next financial crisis. Banks need to understand who they are doing business with and the nature of their contracts in order to make better decisions than they made in the past,” said Magruder.

Catch the full interview below:

The Noetic approach

“We want to make sure the data is fit for use. We like to partner with our clients and help them reach a level of maturity they haven’t reached before. We begin with a model, the Noetic master model, based on our experience at the biggest banks in the world. It’s a model that begins with the concept of parties, and the clients who’ve decided that the model works for them include some of the largest banks and brokers and exchanges in the world. The model is technology agnostic, it will run on anything you like, and it’s designed to help our customers understand who their customers are. Or who the vendors, regulators or owners are,” explained Magruder.

Justin Magruder observed that “the tides have turned in the industry, from a concern about technology (fastest, biggest) to the content and what are we doing with it.”

Big Data is allowing decision makers to make better decisions. This conference is all about the new role of the CDO.

“In the past, IT didn’t want us in their backyard, because that was a space they felt they owned. Now it’s a legitimate space. As the CFO is interested in financial risk, the CDO is interested in operational risk,” said Magruder. “And business value, and transparency,” added Vellante.