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Datactics helps Cardinal Analytics cleanse and match data to calculate risk

Datactics Ltd, a leading provider in data quality and matching software, today announces that Cardinal Analytics, the corporate bond risk analytics firm, has signed a three year license for its flagship platform, FlowDesigner, to ensure that the data fuelling its credit risk model is accurate, complete and timely.

In any given year, $100-$300 billion of bonds can default. The US corporate bond market stands currently at $8 trillion with more than 40 per cent of the lowest rated bonds defaulting in their lifetime.

Cardinal Analytics’ automated system alerts traders to the risk of a bond going into default and according to CEO, Mark Fletcher, their system goes further than traditional probability models: “We provide more granular analysis, assessing billions of data points for the actual bonds not just the company. We supply daily rank ordering of bonds, from highest to lowest risk, and also determine if an individual bond or industry sector carries a heightened risk compared to peers, an industry or the overall market.”

Three end-of day data feeds from Mergent with different naming conventions and identifiers are profiled, cleansed and matched to power Cardinal Analytics’ sophisticated credit risk model. Additionally, Cardinal uses ratings information as a source. Daily, the 400,000 corporate bonds, 40,000 companies’ stock price data and 40,000 accounting data end-of-day bulk feeds represent millions of rows of data. When their bespoke Python-based program, which required advanced programmers producing thousand lines of code in a 12 week development cycle, failed to reach the goal of near perfect match rate, the firm turned to Datactics for assistance to manage both ETL and matching for reference data.

According to Fletcher, having a pre-analytics layer that they can trust to produce fully cleansed and matched data is critical for their business. He cited three core reasons for opting for Datactics, its matching power, fast implementation and transparent audit trail: “In just three weeks, the Datactics solution consistently matched over 99 per cent of bond data correctly without the need for manual intervention. With its clear audit trails it’s easy to visualize the match results at each stage of the process and see the effect of changing rules in the underlying data within seconds rather than batch review outputs at the end of a time-consuming black-box process.”

“With Datactics, we’ve saved valuable resources in terms of maintaining proprietary ETL and matching code in Python and vastly improved our time to market which is crucial in the financial markets. As our company evolves, FlowDesigner allows us to match more companies, immediately add new datasets like non-US bonds and quickly move into other asset classes - essentially the flexibility to extend our product portfolio” added Fletcher.

Datactics has significant experience in instrument mapping projects in the US and Europe using Bloomberg, Thomson Reuters and other symbologies like CUSIP/ISIN/SEDOL, LEI and FIGI. According to Stuart Harvey, Datactics CEO, these projects have enabled the firm to develop a robust toolkit for rapidly building a pre-analytics cleansing and matching layer for many types of instrument data and reference data.

Commenting on this latest client win, Stuart Harvey said, “We are very pleased to provide a secure, cloud-based pre-analytics system for Cardinal Analytics, an innovative company that requires near perfect matching capability to facilitate the provision of the market’s most granular risk scores.”