While many banks use the London Stock Exchange Group’s real time market information, few are aware of the scale of the transformation process the group has embarked on over the past half decade.
The London Stock Exchange is one of the world’s oldest exchanges, becoming today’s LSEG when it merged with Milan’s Borsa Italiana in 2007.
More recently, it has shifted its data strategy from a compliance-only initiative to something more commercially driven — a change it describes as moving from a “defensive” practice to an “offensive” approach.
Operating in more than 60 countries, LSEG employs over 26,000 people globally. Debbie Lawrence, LSEG’s group head of data strategy and management, and David Thomas, the group’s head of data trust, data & analytics & commercial data, have been at the heart of the group’s data lineage journey since it began, tracking data from origin to consumption.
It started in 2021 with a syndication of the stock exchange’s approach and strategy that year. LSEG brought data management firm Solidatus on board in 2022, with the process beginning in earnest the following year with the start of the group’s dataset and lineage mapping process.
LSEG should complete most of its early plans — the initial mapping of its 1400 datasets — by mid-2026, with ongoing maintenance thereafter.
“We started this journey probably looking down the barrel of increasing data regulation around the world,” Lawrence said, with LSEG now aspiring to be “market leading” in data governance.
Career history: Debbie Lawrence
2020-present: Group head, data strategy & management, LSEG
2018: Global head of data management and strategy, Refinitiv
2012: Head of investment management product and content, Thomson Reuters
2010: VP, head of fundamentals content operations, Thomson Reuters
2008: Head of client services, MFT, a Fidelity International Company
Thomas, formerly a data executive with Barclays and HSBC, immediately asked questions around tooling, lineage and data dictionaries when he joined LSEG in 2021.
At the time, Lawrence recalled thinking “we’ve been a data company for 150 years . . . we’ve got all of this”. But the need to invest and the work required quickly became clear, she said.
LSEG is working to shift its approach to data the “defensive” — designed to fend off regulation — to the offensive, Thomas said.
“We’re a commercial data organisation, so [our approach looks at] how we align with that, and turn data governance and things that come alongside that — like the cataloguing capability and offering metadata services to our customers — to be a far more offensive use, and really trying to align that with our commercial offerings,” he explained.
Solidatus is a “smart offering” for that, with its visualisation capability instrumental in proving to people that data lineage can be done, Thomas said.
David Thomas
2021-present: Head of data trust, data & analytics & LSEG commercial data, LSEG
2018: Global head of data management & Emea CDO, HSBC
2017: Regulatory CDO & Emea, UK & Menat CDO, HSBC
2014: Global head of ClientHub, HSBC
2010: Global head of client data, Barclays
2006: Director, global head of client data, ABN AMRO
2000: Project manager, UBS
HSBC, Goldman Sachs and BNY are among some of the banks that also use the tooling, with the latter currently infusing data practices “at the core of how the bank does business”.
A ‘catalyst’ for better data management
The EU’s Digital Operational Resilience Act was the “trigger point” for data lineage at LSEG.
“It was the catalyst for us to get the momentum and the support from the senior leadership team, because this is a multiyear journey, and often those are the hardest ones to get everybody in line behind,” Lawrence said.
Known as Dora, the rules came into effect in January and aim to strengthen firms’ IT security.
Without a lineage tool, LSEG would be “flying a little bit blind”, Lawrence added. “I’m not entirely sure how we survived up until this point.”
“The technology has moved on, and the expectations of the market and the regulators is so much bigger now that you just simply have to have these tools,” she said, noting that for Dora, it’s “incredibly important.”
Dora has spurred LSEG’s customers to demand information relevant to the regulation, as well as for pending artificial intelligence acts that “we all anticipate coming in”, Thomas said, describing such conversations as typically focusing on “proactive offensive opportunities within the data space”.
Industry is upping data management
The industry has been trying to “solve” for data lineage for many years, Lawrence said. “Sometimes the technology suddenly just all comes together. But it does take investment . . . it’s not just writing a cheque and suddenly it all appears.”
Many of LSEG’s clients want to understand and learn from the group’s approach. “We’re all on the same journey, whether you’re a data vendor or a large investment bank or a large asset manager, everybody’s on the same journey as it relates to data,” Lawrence said.
One of the biggest challenges for banks is the scale of the work and the investment required, Thomas said.
“There’s a reason [no one has tackled data lineage]. It’s bloody difficult to get right.”
“I’ve been at probably seven different institutions working in the data space. Nobody’s ever done this, and even some of the traditional players — probably on the banking side, who’ve invested more than most in the last 15 years — have never attacked lineage,” Thomas said.
“There’s a reason for that. It’s bloody difficult to get right, and even when you do get it right, you then have to maintain the data,” he added.
Banks have lagged on data lineage in part because there hasn’t been the “ultimate driver” to do so, until Dora mandated it and such requirements were compounded by AI.
The Basel Committee’s BCBS 239 principles for effective risk data aggregation and risk reporting have long placed requirements on banks, but many firms are still “playing catch-up” on data element aspects.
“Obviously, Dora is only . . . three years old, so most [firms] are probably in a similar position, and started addressing it probably three years ago at the earliest,” Thomas said.
Significant legacy estate also poses challenges, which LSEG faces like many of its incumbent banking peers. Its UK counterparts alone could collectively spend £3.3bn on maintaining their legacy systems next year.
“The problem that we have — and we’re far from unique in that sense, the bigger banks that I’ve worked at will have exactly the same problem — is that there’s still quite a lot of legacy estate,” Thomas said.
“So it’s not just the tool, it’s how it connects to different databases of different types, and in some cases lots of different ages,” Thomas said, with LSEG currently tackling challenges with its mainframe capability.
Based on banks which have shared information with LSEG, Thomas says many have “tried before and failed”, partly down to lack of support and investment, as well as the lack of tooling.
The sheer work required is why some chief data officers have “shied away” previously, he added.
“It’s difficult, requires a huge amount of effort, and people haven’t deemed it necessary,” Thomas said. “Now it is necessary. We’re looking for ways of speeding that up and ensuring that the data is maintained on a regular basis rather than becoming stale, which is also a traditional problem.”
Reducing risk
The funding required for data lineage tools is “not overly significant”, Thomas said. Instead, a lot of LSEG’s investment is funnelled to workforce education and culture change.
“The cultural investment is just as important as the actual cost and spend from a budgetary perspective, and that clearly necessitates fairly senior level investment,” Thomas said.
Without senior leadership buy-in, firms will probably face challenges even with significant financial investment thrown at the problem, he added.
Internally, and increasingly so over the past few years, the biggest metric LSEG has evidenced as part of its data shift is risk, Lawrence said, where the group’s risk tolerance is unsurprisingly akin to banks’ — low.
Since 2023, the team has been working to evidence how it is reducing key risk indicators to LSEG’s leadership team, the risk committee and the board around risk reduction.
As LSEG progresses on its data journey, Lawrence looks to see improvements across other areas such as the human cost of data validation and quality checking. “We haven’t quite finished the project to be able to point to any of those, but the biggest one has been the risk aspect,” she said.
Thomas anticipates revenue growth as the stock exchange group exposes more of its data sets to its consumers. “Therefore, you can expect a realistic uptick in the amount of data that we sell,” he said.
“It might not be a direct revenue number that we can put our fingers on, but we’re definitely contributing to that level of proactive use of data in the commercial space.”