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The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Poll Results: Operational Risk and Cost Top List of Concerns for RDR Readers

Operational risk and the desire for greater cost savings are the key issues driving financial institutions to invest in their data management infrastructure, according to the latest results of our reader poll. This result is unsurprising really, given the focus on doing ‘more for less’ in the current financial climate.

What is perhaps more surprising is that regulation and compliance are not affecting these projects, despite the recent increase in regulatory scrutiny and predicted increase in compliance spend. Not a single respondent to the Reference Data Review poll highlighted regulation and compliance as a driver for investment in data management. 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. 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.

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