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

A-Team Insight Blogs

GoldenSource Discusses the Pitfalls and Potential of Entity Data Management

Entity data is a fundamental building block of many systems, but all too often large financial institutions fail to manage the data strategically and incur negative customer reactions, increased costs and regulatory reporting errors. The solution to these problems is an enterprise-wide approach to entity data secured by strong data governance.

The problems and potential of entity data management are the subject of a GoldenSource white paper, Complex Client Structures and Fragmented Systems Landscapes, that is authored by Tom Stock, senior vice president and global head of product management at GoldenSource, and Jonathan Poole, a consultant at FinReg.

The authors note their own observations of disparate entity data management architecture that is inherent to many large multinational organisations, and suggest this fragmentation of entity data management is the result of organisational change, particularly merger and acquisition; solutions built in the absence of a data governance strategy; solutions built with a defined project time or cost constraints; and solutions built as tactical responses to business problems that subsequently become business critical.

The consequences of complex client structures and fragmented systems landscapes, notes the paper, include negative client sentiment arising from situations where employees do not have the necessary information or clients receive multiple requests for information that has already been provided; increased costs of data processing due to duplication of effort as a consequence of having to maintain multiple versions of data in different systems; increased risk of penalties arising from regulatory breaches due to operational errors and lack of transparency between business units; increased risk of financial loss arising from credit events; and lost sales opportunities caused by wasted sales and marketing expense, and distorted opportunity identification.

But all is not lost. Charlie Browne, head of market data and risk solutions at GoldenSource, explains: “Banks often follow the mantra of putting clients first, but their infrastructure doesn’t always allow a good understanding of who the clients really are. To resolve the problem, one approach is to implement strong entity data governance, move progressively towards a single identifier for client and hierarchy data, and change the mantra to emphasise that well-managed entity data is key to successful projects.”

The paper acknowledges that it is difficult to justify the business case for systems replacement and implementation of an enterprise-wide entity data management solution, and instead reflects Browne’s view, suggesting firms should take a measured approach to building more unified data models and systems architectures. Successive projects then have the advantage of offering sponsoring organisations quick wins and benefits including demonstrable business improvements, a foundation for further entity data projects and more efficient deployment of business resources.

Related content

WEBINAR

Upcoming Webinar: Managing LIBOR transition

Date: 20 April 2021 Time: 10:00am ET / 3:00pm London / 4:00pm CET Duration: 50 minutes The clock is ticking on the decommissioning of LIBOR towards the end of this year, leaving financial institutions with little time to identify where LIBOR is embedded in their processes, assess alternative benchmarks and reference rates, and ensure a...

BLOG

BearingPoint Sells RegTech Business to Nordic Capital

Tech consultancy BearingPoint has confirmed the sale of its independent RegTech business unit to Nordic Capital, a private equity investor with a strong track record of developing technology companies and enabling and driving global growth. The sale does not come as a complete surprise – RegTech has been working to develop its autonomy within BearingPoint...

EVENT

Data Management Summit London

The Data Management Summit Virtual explores how financial institutions are shifting from defensive to offensive data management strategies, to improve operational efficiency and revenue enhancing opportunities. We’ll be putting the business lens on data and deep diving into the data management capabilities needed to deliver on business outcomes.

GUIDE

Regulatory Data Handbook 2020/2021 – Eighth Edition

This eighth edition of A-Team Group’s Regulatory Data Handbook is a ‘must-have’ for capital markets participants during this period of unprecedented change. Available free of charge, it profiles every regulation that impacts capital markets data management practices giving you: A detailed overview of each regulation with key dates, data and data management implications, links to...