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

A-Team Insight Blogs

Data’s day in the sun

Share article

If nothing else, this month’s TSAM conference demonstrated that regulators are going to play an even more important role in data management than ever before. As Mike Atkin, managing director of the EDM Council, told delegates, the regulatory community is now actively taking an interest in how to encourage greater standards adoption in the area of data management.

The EDM Council itself has been leading the discussions with the regulators over the last few months, including the European Central Bank (ECB), the US Federal Reserve and the Securities and Exchange Commission (SEC), according to Atkin. The ECB is even contemplating getting involved in providing a repository for data identifiers for the market in the future (see our cover story on TSAM for details). Moreover, John Bottega’s appointment as chief data officer of the New York Fed is further evidence that the regulators are well aware of the importance of data management within their own walls. The hiring of ex-Citi data management champion Bottega signals the central bank’s understanding that even its own internal data issues need to be given the correct level of scrutiny. However, even though the regulatory community is focusing on data management and data quality in the background, regulatory compliance is still not having a significant impact on institutions’ spending in this area, according our latest reader poll. Rather, operational risk and the desire for greater cost savings are the key issues driving financial institutions to invest in their data management infrastructure this year. This result is unsurprising really, given the focus on doing ‘more for less’ in the current financial climate, but it is surprising that not a single respondent to the Reference Data Review poll highlighted regulation and compliance as a driver for investment in data management. The poll indicates that despite the recent increase in regulatory scrutiny and predicted increase in compliance spend, regulation and compliance are not yet significantly driving spending for data management projects. Also out of the spotlight were reputational risk and M&A, each failing to garner any votes as priorities driving data spend. Operational risk topped the list with 50% of the vote, closely followed by cost savings at 33%. The remaining 17% was attributed to the ‘other’ category, which one can only assume means factors such as improvements to client servicing and the desire to improve data quality. The obvious reason for this result is that the reduction of operational risk and cost are easier wins when championing the issue of data management within an institution. Senior management’s strict scrutiny of ROI for projects in the current environment means data management projects must provide tangible metrics such as cost savings to get the green light. The reduction in headcount over the last six months across institutions also means that they have to find alternatives to people to throw at the problem and automation and data centralisation are apparent solutions. The results of the poll confirm that risk is very much a concern in the market, as noted by a number of recent research reports into the area of data management (see last month’s issue of Reference Data Review for a rundown of some of them). But it is surprising that regulation is not a key concern, despite the high profile that regulators are maintaining at the moment. Perhaps the results will tell a different story in six months’ time, once the regulatory ball gets rolling and the market is faced with the prospect of coping with increasingly strict oversight policies. As our other lead story this month indicates, risk and regulation are on the radar of most big firms. BarCap’s Rakesh Nigam reckons it’s only a matter of time before this trickles down to the rest of the industry, especially with the advent of stress testing. And judging by the state of the market, it won’t be an easy transition for all.

Related content

WEBINAR

Recorded Webinar: Overcoming the Barriers to Implementing RegTech Solutions: The View from Either Side of the Fence

RegTech holds the promise of targeted, agile and often low-cost solutions to the real-world problems faced by financial institutions across the board. So why is it so difficult to get RegTech projects off the ground? RegTech solutions providers complain that it’s difficult to get access to decision-makers, and even when they do it’s tough to...

BLOG

COVID-19: Regulator Round-up (5 May)

In these days of unprecedented economic pressure and accompanying financial volatility, regulators around the world are realigning their priorities and rapidly shifting their strategies to support institutions through the ongoing crisis. In this regular weekly feature, we keep you up to date on the latest regulatory news, responses and approaches – from deadline delays to...

EVENT

Data Management Summit London

Now in its 11th year, the Data Management Summit (DMS) in London, will explore how financial institutions are adapting their data strategies to capitalise and support revenue generating activities and operational efficiency in today's digital and cloud based environment. Join us to hear from leading data practitioners and innovators who will share insights into how they are pushing the boundaries with data and delivering value through data and analytics.

GUIDE

RegTech Suppliers Guide 2020/2021

Welcome to the second edition of A-Team Group’s RegTech Suppliers Guide, an essential aid for financial institutions sourcing innovative solutions to improve their regulatory response, and a showcase for encumbent and new RegTech vendors with offerings designed to match market demand. Available free of charge and based on an industry-wide survey, the guide provides a...