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

A-Team Insight Blogs

New Report Calls for Banking Community to Define Regulatory Data Standards to Control Spiralling Compliance Costs

A new preliminary report launched today titled ‘Strong Foundations for Regulatory Reform?’ finds that the monetary implications for financial services firms that fail to establish a more consistent data management plan can be immense. While there is currently no public sector assessment of the cost to comply, initial research studies suggest it will be in the region of $390 million per firm over the next five years**. The report, due out in September 2011, also finds the extent to which the industry defines global data standards to meet G20 regulation will be a key issue affecting the total cost of compliance.

The preliminary report was authored by regulatory think tank JWG and was presented to an audience of 70 banking professionals at an event in London during July. The event, which was sponsored by DataFlux, a leading provider of data management solutions, analysed the wide range of regulations designed to introduce greater stability into the banking system.

JWG analysed over 35 separate regulatory documents from the new global regulatory regime consisting of over 1,200 pages. Documents included the Financial Services Authorities’ ‘Enhancing frameworks in the standardised approach to operational risk’ and the Securities and Exchange Comissions’ ‘Swap data recordkeeping and reporting requirements – Pre-enactment and transition swaps’. Findings point to the inclusion of similar data management requirements within the various new regulations and calls on financial institutions to address the requirements during the formation of the standards that will be used to manage data and report to regulatory authorities.

PJ Di Giammarino, CEO JWG commented: “The point is simple. Without a new ‘global regulatory data architecture’ and data glossary to back it up, decisions on the riskiness of trades, positions, clearing arrangements, net stable funding ratios and counterparty exposures will be more difficult, risky and expensive.” He continued: “Firms have a great chance to step up now in order to help define standards for the way data is governed within their industry and is presented to regulators. The extent to which firms rise to this standards challenge will have a significant impact on the total cost of compliance with the G20’s regulatory regime.”

Colin Rickard, EMEA Business Development Director, DataFlux, commented: “While there is a pressing imperative to define global data management standards, this report clearly articulates that firms must take action now. Regulators are asking financial institutions to not just present a set of reports but to also have systems in place that can guarantee the accuracy and validity of the underlying data.” He continued: “The onus is on the industry to demonstrate it can show an audited path for the flow of data within the organization, and that checks and balances are in place throughout the data lifecycle.”

Related content

WEBINAR

Recorded Webinar: Managing unstructured data and extracting value

Unstructured data offers untapped potential but the platforms, tools and technologies to support it are nascent, often deployed for a specific problem with little reuse of common technologies from application to application. What are the challenges of managing and analysing this data and what are the considerations when making investments in this area? Data quality, consistency...

BLOG

LIBOR’s End Should be a New Beginning for Corporate Treasuries’ Data Management

By Neil Sandle, Head of Product Management, Alveo. For many treasuries, LIBOR (London Interbank Offered Rate) is one of their most critical benchmarks. Together with the exchange rates of major currencies it is an essential piece of data, underpinning contracts worth trillions of dollars. The long-standing centrality of LIBOR is why well-publicised global moves to...

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

Entity Data Management Handbook – Seventh Edition

Sourcing entity data and ensuring efficient and effective entity data management is a challenge for many financial institutions as volumes of data rise, more regulations require entity data in reporting, and the fight again financial crime is escalated by bad actors using increasingly sophisticated techniques to attack processes and systems. That said, based on best...