Golden Copy: The Importance Of Adaptability

Regulatory compliance may be a foundation of data management that our coverage regularly explores, but the emerging angle found in the stories in this month's issue is the importance of adaptability. In "Power Up Your Data Assets," we hear multiple perspectives on the demand for increased data collection created by new regulation -- from the firms who are affected, service providers, consultants and a regulator, all of whom were discussing the issue at the Sibos conference in Geneva last month.

Adaptability in data operations arises where data assets are being leveraged, and especially when internal communications are improved to ensure that the greatest possible value is being derived from the data. EY's Patrick Craig said the emergence of financial intelligence units in banks, to better connect the ‘dots' of alerts from different systems, reduces costs and increases efficiency in serving customers with data. To leverage data, as Eric Clapton, head of Lloyds Banking Group's financial crime prevention unit, said, his team grew slowly, by adding colleagues from different units at the bank, in order to ensure better internal communication.

In "Balancing Act," we drill down into a more specific example -- the BCBS 239 risk data aggregation principles. The key to compliance in this case depends on making the data adaptable to the needs of diverse users while ensuring its consistency. Wolters Kluwer's Richard Bennett says that a unified data model that collects market, risk and financial information is a good starting point, while Santander's Jerry Goddard emphasizes that whatever is done for data management has to fit into operations projects that banks or firms undertake.

More insight into which elements of data operations need to become more adaptable can be found in "Swiftly Tilting Frameworks," in which data managers from GE Capital and BlackRock share their views on adaptation for BCBS 239 compliance, and for aspects of the Fundamental Review of the Trading Book and the revised Markets in Financial Instruments Directive that cover risk data management requirements. Like Goddard, BlackRock's Antonello Russo points to the importance of governance and structure in extracting value from data for compliance purposes. Roberto Maranca of GE Capital stresses the need to be proactive when designing data mechanisms, which means making data operations adaptable.

In the September 28 webcast where Russo and Maranca made their remarks, two questions elicited striking responses in an audience poll. While only 14 percent said their risk data transparency efforts are sufficient, about 10 percent more said their firms have enough staff and resources to manage data relevant to risk (and being transparent about risk). So, although one might say a far higher percentage of firms need to make greater efforts on the risk data management front, or at least be confident they have the ability to do so, perhaps data executives would do well to ensure their systems and plans are adaptable enough to deal with varieties of information and the interests of different departments at their firms.