Making a choice on how to manage data, including compliance applications for data, also has to include security considerations
During this week's European Financial Information Summit (EFIS), answers to one of the questions posed in last week's column previewing the conference emerged in discussions ostensibly about other concerns.
I had asked whether centralization or outsourcing to implement data governance strategies would be better or more advantageous for firms. Panelists discussing the current regulatory landscape arrived at some answers concerning data governance as part of their discourse—as did an EFIS keynote speaker focused on cyber security and protecting data.
Jacob Gertel, senior project manager for legal and compliance data at SIX Financial Information, observed that to comply with US Fatca tax withholding and reporting law, and work with the Common Reporting Standard (CRS) used for Fatca reporting, the data that financial intermediaries must deliver is based on data files from their customers. As a result, this data, with its relevance for regulatory compliance, has greater value than it might otherwise. And, Gertel says, SIX seeks ways to make the data available to users without having to set up all new structures for management and distribution.
Fatca or CRS-relevant data is increasing in volume, and resembles the type of "big data" that Dan Crisp, managing director, EMEA, information risk management at BNY Mellon, says needs protection from cyber invasion. "We have gone to a super-abundant world of data," he says. "Conceptualizing data, unless you are a deep subject matter expert, is quite challenging. We have data growing exponentially, bigger and bigger challenges with metadata and visualization-and getting that across to people who may not be familiar with the details."
The European Union's Cybersecurity Strategy and the European Commission's Directive on Network and Information Security, now in place, was a long-shot for passage a year ago, Crisp notes. There is a social element to data, namely the possibility that hackers can use social engineering to gather information on data users and deceive them through social familiarity to gain access, Crisp says. Along with the EU directive, regulators in European nations want firms to demonstrate what systems and organization they have in place, for data protection.
It may seem contradictory to the goal of making data more available for distribution, as Gertel discussed, but the cyber security directive is requiring firms to know what their IT partners or vendors are doing about data security. "We all understand that there's speed to market challenges, and speed of compliance challenges, from regulators; and global regulations are becoming increasingly strict requirements," says Crisp.
So, if your firm is in the middle of deciding whether to centralize or outsource data management, and is considering how to write data governance plans accordingly, the data security issues Crisp raises are also something that has to be figured into that process. That's an unexpected answer to the data governance question, but a valid one.
Bryan Cross, who heads UBS Asset Management's QED group, joins to discuss alternative data and AI.Subscribe to Weekly Wrap emails