The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Data Management for Compliance, Business Performance and Reduced Costs

Regulatory compliance is non-negotiable, business performance is crucial, and pressure on costs is continual. So, how can you source and manage data once for both compliance and performance, and how can you contain costs? These questions and more were addressed during a recent A-Team Group webinarhosted by A-Team editor Sarah Underwood and joined by Dessa Glasser, principal at Financial Risk Group, independent board member at Oppenheimer Holdings and a former chief data officer and chief risk officer; Ken Krupa, chief technology officer at MarkLogic; and Kaylash Patel, market risk lead at Thomson Reuters.

Gauging the balance of investment in data management for compliance versus business performance, an early poll of the webinar audience produced surprisingly positive results in terms of investment in business. Some 48% of respondents noted a roughly 50/50 split in investment in compliance and performance, 29% noted an 80/20 split, 10% a 70/30 split, the same percentage a 60/40 split and just 5% a 100/0 balance with all data management investment in compliance.

Glasser commented: “Many firms have invested a lot in data management for regulatory compliance and it is encouraging that they are now gaining greater insight into their data. If firms understand the data and its overlap across regulation and business performance, they can also save by reducing data duplication.”

Krupa added: “Firms recognise that point solutions are no longer sustainable, and that even where there is a lot of data management for regulation, it is still possible to innovate.” By moving away from point solutions to centralised data management it becomes possible to repurpose compliance data and pivot from a defensive to offensive position by using the data as a base for innovation.

Patel touched on a 2017 Thomson Reuters survey that found financial institutions spending over $50 million on compliance and customer onboarding every year. He said: “There are savings in using just some of the data in a repeatable way. The need is to understand why data is required and see how it can be used elsewhere, not what data you have.”

Considering best practice approaches to managing data for business performance, Glasser explained the need to be able to scale a solution, suggested the use of a service model that provides data from trusted sources, and described how a right-sized data governance model can support a 360-degree view of clients. By identifying and separating core data, this data can be sourced once, shared across systems and used as a basis for the application of business logic.

Vendor data and standard data such as Legal Entity Identifiers (LEIs) can all be shared and used across different applications, although the speakers warned that personal data must be handled carefully. They also noted data that cannot be shared, such as product classification data that varies across regulations. Tools to support data management for both compliance and business purposes including vendor tools, open source solutions, data glossaries and, perhaps most importantly, metadata tools.

Data solutions to enhance business performance increasingly include alternative data, such as social media, location and satellite data. This data is beginning to be provided by specialist data vendors through application programming interfaces (API) and can be used to innovate and gain competitive advantage. Early days, however, with the speakers noting potential problems around the limited volumes and quality of alternative data, and how to link it to existing data.

Wrapping up the webinar, an audience poll demonstrated the value of managing data once for both regulatory compliance and business performance. Some 67% of respondents said this would result in significant business benefits and 38% said it would delver significant operational benefits.

Related content

WEBINAR

Upcoming Webinar: Regulatory change management – challenges, solutions and case studies

Date: 7 December 2021 Time: 10:00am ET / 3:00pm London / 4:00pm CET Duration: 50 minutes Regulatory change has become part of the fabric of capital markets. It has also become increasingly complex as more regulations are introduced, significant amendments are made frequently, and small changes are made on a rolling basis – the whole...

BLOG

Sponsored Blog: FRTB: Local Rules Divergences Add Complexity

By Fausto Marseglia, Head of Product Management, FRTB and Regulatory Propositions, Refinitiv. As the implementation date for FRTB approaches, differing local interpretations of the rules are adding further complexity to an already multi-faceted challenge facing banks. The Fundamental Review of the Trading Book (FRTB) forms part of the Basel III framework with aim of making...

EVENT

RegTech Summit Virtual

The RegTech Summit Virtual is a global online event that brings together an exceptional guest speaker line up of RegTech practitioners, regulators, start-ups and solution providers to collaborate and discuss innovative and effective approaches for building a better regulatory environment.

GUIDE

ESG Handbook 2021

A-Team Group’s ESG Handbook 2021 is a ‘must read’ for all capital markets participants, data vendors and solutions providers involved in Environmental, Social and Governance (ESG) investing and product development. It includes extensive coverage of all elements of ESG, from an initial definition and why ESG is important, to existing and emerging regulations, data challenges...