Compliance with regulators is getting harder for data professionals as economic volatility and geopolitical strains look set to reshape how global financial markets are overseen.
As data professionals brace to take the brunt of the work needed to comply with these rapid and unpredictable changes, A-Team Group will host a webinar that will probe the ways firms can prepare themselves for what is likely to be a very busy couple of years.
Data Management Insight’s webinar entitled “Best practice approaches to data management for regulatory reporting” will examine how institutions can best manage their data, look at the tools at their disposal and discuss the challenges to compliance in the new regulatory landscape.
The webinar panel will comprise Emma Kalliomaki, Managing Director at ANNA and the Derivatives Service Bureau (DSB); Anuj Agarwal, Director – Finance Head of Data Governance at SMBC Corporation; James Hope-Lang, Data Management Group Data & Analytics, Technology & Services at Danske Bank; and, Paul Cottee, Director, Subject Matter Expert, Compliance at NICE Actimize.
Always Changing
Rules governing the operation of markets around the world are being introduced and changed with unsettling frequency and the fluid and febrile global economic landscape means it’s getting more difficult to predict what’s next on the horizon. While the US has signalled a gear-change in its stance on supervising markets, for instance, the European Union says it remains committed to a hardline approach to oversight. Yet the US continues to place new restraints on business and the EU has begun watering down some of its own regulations, particularly those covering ESG.
And as jurisdictions in fast-growing emerging markets roll out their own governance rules, hopes of harmonising international codes look more and more distant.
These uncertainties and difficulties feed straight into the in-trays of chief data officers and data engineers at financial institutions, upon whose shoulders much of the burden of compliance with reporting will fall. Data professionals will be expected to observe some key criteria in meeting their firms’ obligations, said DSB’s Kalliomaki.
“Best practice approaches to data management for regulatory reporting include maintaining data lineage and auditability, having clear policies and ownership, leveraging standards for data alignment and harmonisation — while addressing evolving regulatory requirements,” she told Data Management Insight.
‘Completeness, Accuracy and Consistency’
An effective data management strategy can marshal the information needed by regulators and package it into a report that can be ingested by oversight bodies’ own technology. But doing that requires a lot of care and data management, said NICE Actimize’s Cottee.
“The most critical aspects of data for regulatory purposes – not just reporting – are completeness, accuracy and consistency,” he told Data Management Insight.
Completeness is vital, he said, because without surveillance data being passed on, regulators might not know the entity is doing business – a failure that has led to sanctions being placed on some firms. Having accurate data is important because it also helps the company to understand aspects of its own business, especially the market risks it faces. And, consistency is vital to ensure that trends can be identified and acted upon quickly. It’s also needed to provide a single source of truth that enables firms to compare risks and performance across business lines, over time.
“These three aspects will then allow for better compliance, continuous monitoring, scenario and stress-testing,” Cottee said. He added that they will also benefit from nearer-real-time data collection to enable the spotting of risks sooner, and they will be easier to implement in a unified data architecture.
Fragmented and Faulty
In the same vein, Danske Bank’s Hope-Lang told Data Management Insight that data management for regulatory reporting is also beneficial to firms’ business operations. But he added that while effective management could bring enterprise-wide benefits, firms need to get their data foundations right – and that means updating their technology architectures.
“Don’t underestimate the continued proliferation of legacy platforms and the lack of off-the-shelf integrations to the next generation of data quality and data lineage tooling,” he warned.
Among other topics to be discussed will be how robust data governance frameworks can be implemented to meet regulatory expectations; how automation and technology can be applied to streamline data workflows and the likelihood of international reporting standards being developed to ease the compliance processes for global companies.
The latter is a subject that Kalliomaki feels will usher a new era of reporting capabilities.
“International standards bring efficiencies into regulatory reporting processes, they improve data quality and consistency, increase automation, reduce interpretation discrepancies, and enable stakeholders to fulfil obligations across different jurisdictions,” she said.
- A-Team Groups “Best practice approaches to data management for regulatory reporting” webinar will be held on 13 May at 10:00am ET, 3:00pm London, 4:00pm CET. Book your place by clicking here.
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