About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

New JWG Study Shows Firms Slow to Respond to Risk Data Management Requirements

Subscribe to our newsletter

Research launched by JWG today finds that global financial services organisations are not actively reviewing their risk data quality processes following the fall-out of the financial crisis. The study, which includes responses from 20 risk, data, and finance professionals in 16 global firms, shows that, while risk data quality is a pertinent issue, little has changed in the way risk data is managed. This ‘business as usual’ mindset should come as a worrying symptom to firms’ senior management in the face of increased regulatory scrutiny of risk data.

The survey has found that:

? The industry has woken up to the importance of risk data management: 100% of respondents believe that risk data quality is at least an ‘important’ issue.

? However, regulatory pressure has not yet catalysed action: fewer than half of those surveyed say that their firm’s business and risks are aligned.

? Only 22% of those surveyed strongly agree that their respective firms have assigned adequate resources and personnel to risk management improvement programmes.

? Most firms believe that the benefits of improving risk management information (MI) are primarily soft, and the drivers are internal as opposed to regulatory.

It is clear that firms are taking a cautious approach to a complex and costly issue and they have not set the bar very high when it comes to new targets. Further, there is a lack of board-level clarity as to how to achieve these targets.

Despite this laissez-faire attitude, there are some early examples of plans for long-term infrastructure change projects. Large firms have the most work ahead of them as they are faced with the challenge of developing risk management data sets spread across multiple, disparate businesses.

According to JWG CEO, PJ Di Giammarino, “The big question is to what extent regulators will define and enforce meaningful risk data policy. If the past is any indication, it is by no means certain that they will at all. If they do, however, it is reason enough for boards to be worried.

”We are currently in an 18-month regulatory window in which the industry has a chance to set things right, with Basel III and Solvency II just around the corner. If the industry misses its chance and gets this wrong, there could be severe consequences. Firms could be mandated to increase capital buffers, and more capital tied up would affect the price of credit, the availability of mortgages and loans to homeowners and businesses.”

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Best Practices for Building High-Performance Data Infrastructures

The requirement for high-performance data systems to support trading analytics for hedge funds, high-frequency trading firms and electronic liquidity providers is well established. But the explosion in Big Data over the past several years has expanded the scope of inputs being used by these firms. At the same time, cloud technologies have added complexity to...

BLOG

PRA Package of Regulatory and Data Strategy Change Planned for Completion by 2026

The Prudential Regulation Authority (PRA), which regulates and supervises financial services firms as part of the Bank of England, is planning to complete its RegTech and data integration strategy by 2026, bringing in a package of change including a new ‘look and feel’ to regulation, and refinements to what data is collected, how it is...

EVENT

TradingTech Summit London

Now in its 12th year the TradingTech Summit London brings together the European trading technology capital markets industry, to explore how trading firms are innovating in today’s cloud and digital based environment to create flexible, scalable trading platforms to support speed to market and business agility.

GUIDE

Regulatory Data Handbook 2022/2023 – Tenth Edition

Welcome to the tenth edition of A-Team Group’s Regulatory Data Handbook, a publication that has tracked new regulations, amendments, implementation and data management requirements as regulatory change has impacted global capital markets participants over the past 10 years. This edition of the handbook includes new regulations and highlights some of the major regulatory interventions challenging...