The path to effectively transforming data management “is to combine tried and true processes and solutions with the selective deployment of new technologies with the target to remove undesirable duplication of both rules and storage”, according to a new white paper from Wolters Kluwer.
The white paper, integrating finance, risk and regulatory reporting through comprehensive data management, suggested that technological innovations are enabling institutions to merge their finance, risk and regulatory reporting (FRR) functions into a set of processes.
These processes will help meet the twin demands of regulatory compliance and a competitive commercial landscape. The paper illustrates how a dedicated FRR data warehouse that links risk, finance, and other key functions to merge old systems with new ones, will provide banks with a competitive advantage.
It suggested that duplication is one of the most challenging data management burdens facing banks globally.
Wolters Kluwer experts advised banks to build a centralised, dedicated and focused FRR data warehouse that can chisel away at the barriers between functions.
Clean, integrated and standardised data in one central warehouse confers advantages such as the elimination of data duplication and the elimination of analytic process duplication, according to the white paper.
It explained that the evolution of regulations has left banks with various bespoke databases across credit, treasury, profitability analytics, financial reporting and regulatory reporting, with the same data appearing and processed in multiple places.
It also noted that this mass of bespoke databases leads to duplication of data and processes, and the risk of inconsistencies.
The idea behind the integration of finance is that sound regulatory compliance and sound business analytics are manifestations of the same set of processes, explained the report.
According to the report, demands for data and for a technology solution to manage it effectively, have served as a catalyst for a revolutionary development in data management, particularly regulation technology. But many regtech solutions can be highly specialised and localised products and services from small providers.
Will Newcomer, vice president of product strategy for Wolters Kluwer’s FRR business and author of the paper, said: “That encourages financial institutions to approach data management deficiencies gap by gap, project by project, perpetuating the compartmentalised, siloed thinking that was the scourge of regulators and banks alike after the global crisis.”
Inga Rottmann, vice president and head of global marketing at Wolters Kluwer’s FRR business and one of the authors of the paper, commented: “Satisfying the demands of supervisory authorities and maximising profitability and competitiveness in the marketplace involve similar types of analysis, modelling and forecasting.”
Rottmann added: “Competitive pressures remain high, and regulators keep raising the bar for compliance reporting. They continually demand more data, more often, in finer detail and with greater accuracy.”
“The industry and the technology that supports it strained until recently to keep pace, but that is changing thanks to developments in regtech.”
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