Future-proofing your data strategy for today’s complex regulatory environment

“The rising demand for data analytics and the need to increase automation using AI/ML technologies mean there has never been a greater need for having a solid foundation of accurate and timely data in order to ensure accessibility, consistency, and accuracy”.     

On 29th April, Kieran Seaward, Head of Sales took part in a panel discussion entitled “Future proofing your data strategy for today’s complex regulatory environment” at the Data Management Summit 2021. He spoke alongside Malavika Solanki, Member of the Management Team, DSB (Derivatives Service Bureau), Robert Wallos, Chief Innovation Officer, West Highland, Haider Mannan, Regulatory Specialist, SIX and Phillip Dutton, Co-CEO and Co-Founder, Solidatus. 

The panel gave the contributors the opportunity to explore:  

• Reviewing the regulatory landscape and regulations causing the biggest data management challenges 
• Approaches to solving these data management problems 
• How new and emerging technologies like AI/ML, business process automation and cloud can help 
• What’s next on the regulatory horizon and how financial institutions can prepare 

We caught up with Kieran about the panel and delved into the critical topic of fully understanding the need to future proof your data strategy for a complex regulatory environment.  

To start us off, if you had to name one regulation that is presenting your clients with the biggest data management challenges, what would it be? 

Firstly, I would like to point out that I have seen a positive trend in the market over the past year with organisations building foundational data management and governance from the ground up for the right reason, not just reacting. Regulatory compliance is often one of the outcomes but is no longer the sole driver, which I believe is a positive shift moving forward. 

Some of our clients are still wrestling with the challenges associated with risk data aggregation, in fact, we are working with Phil Dutton and the team at Solidatus on a joint opportunity in Asia where the program driver is explicitly BCBS239.  

However, I would say the regulation that is still creating the biggest data management challenges is Know Your Customer (KYC).   

The identity verification requirement of KYC is still a hugely manually intensive process that suffers from a lack of automation, which means it is not only expensive but also prone to significant ‘fat-finger’ related data quality errors. Firms are handling multiple sources of corporate entity information, for example: internal legal entity master, vendor sources (D&B, BvD) and company registration info such as UK Companies House, all of which have slightly different versions of the truth. Not to mention the hierarchies associated with those organisations. 

What’s next on the regulatory horizon and how should financial institutions prepare? 

The Bank of England, PRA and FCA are conducting public forums on the safe adoption of AI & Machine Learning, discussing topics such as ethics, explainability and automated decision making. It will be interesting to see what develops out of that. (Our colleague Fiona Browne is a founder member of this Forum). 

The regulatory reporting landscape associated with ESG is getting increasingly complex and demanding. 

How can firms prepare? They must build foundational management practices and governance programs from the ground up. This will make organisations better equipped to adapt to new regulatory demands and reporting standards. And it’ for more than just regulatory requirements; the rising demand for data analytics and the need to increase automation using AI/ML technologies mean there has never been a greater need for having a solid foundation of accurate and timely data, in order to ensure accessibility, consistency, accuracy and – probably most importantly – build trust in the data both internally and externally.  

This will also make firms seek to more easily integrate alternative data with their internal data and systems; a “bottom-up” preparation and standardisation of this information is a key thing that firms can do to prepare. 

To have further conversations about future-proofing your data strategy for today’s complex regulatory environment, reach out to Kieran Seaward, Head of Sales. Or, if you wish to find out more about how Datactics can help you future proof your data strategy, you can book a one-to-one consultation with Kieran Buchanan.  

Click here for more by Kieran Seaward, or find us on Linkedin, Twitter or Facebook for the latest news from Datactics.   

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