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A-Team Insight Blogs

Data Management is Now Partnering with Risk and Compliance, Rather than Being a Poor Second Cousin, Says RBC’s Sutton

The increased attention being focused on data management by senior execs has resulted in the function being viewed as more of a partner to risk or compliance teams within financial institutions, according to Julia Sutton, global head of customer data and onboarding at Royal Bank of Canada (RBC). Speaking at the recent EDM Council and Headstrong event, Sutton explained that because data management usually sits within operations,  it could be said that generally it was seen as a somewhat poor relation when compared to functions such as risk and compliance, but now they are able to work together as partners to get the changes that need to be made pushed through their enterprises.

“Data management is growing in importance internally for the business. We are not being invited to the take part in conversations from which we used to be excluded,” she said. Data quality must be reliable enough to ensure consistent reporting to the regulator for areas such as liquidity risk, she continued: “Guessing is not good enough.”

Lorraine Waters, head of instrument and pricing data at Royal Bank of Scotland (RBS) Global Banking and Markets (GBM), said that similar moves are happening within her firm: “The co-sponsor for our project is risk, rather than operations or IT.”

Tom Dalglish, director and chief information architect at Bank Of America Merrill Lynch, contended that the industry should be careful what it wishes for, however. “Ten years ago it was a struggle to get funding for data management but it was easier to hide from internal and external scrutiny, now regulators are putting data quality under the spotlight. There is even collaboration between regulators to this end, with some triangulating and comparing the data we provide to them,” he said. Data management may be garnering more investment, but it’s happening for a reason.

Nick Skinner, head of data management strategy at custodian bank Northern Trust, noted that this scrutiny has had the impact of raising firms’ horizons beyond 12 month projects to those that could take a couple of years to complete. They have been forced to think about incoming regulation that is being introduced in 2012 and beyond, and therefore compelled to sign off budgets for rolling programmes to accommodate these changes.

“It took a crisis for people to realise the importance of data quality to the business,” said Dalglish.

However, Waters added that regulatory compulsion is not the only reason for an increased focus on data quality: competitive advantage is also a key driver. Peter Serenita, global head of data management for client onboarding and account maintenance at HSBC, agreed: “The fact that enterprise data management projects have been going on regardless of regulatory developments indicates that internal drivers are stronger than external ones in many cases.”

Serenita indicated that HSBC’s own data management project, which is flying under the One HSBC banner, is not about cost savings, it is about getting data quality right. He said that the budgets for the project for next year have already been signed off and have doubled from the previous year, to highlight this fact.

Skinner contended that this price was the cost required to stay in business in the current market. The business is now asking a lot more of their data management teams, but there has not been a massive increase in staff to accommodate these increased demands, agreed panellists. “It is like trying to change the wheel of a car whilst it is moving,” joked Serenita.

The shortage of good quality staff was also highlighted by a number of panellists as a key challenge going forward.

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