If you’re a Chief Data Officer (CDO), lingering bedtime thoughts about what may be lurking in your database could keep you up at night. And it’s easy to see why. Today’s financial services companies are so tightly regulated that any slip-up can be costly—and not just financially. Tales of noncompliance penalties levied against financial institutions spread like wildfire in the media, damaging your company’s reputation and spooking investors or potential customers.
Staying on top of financial regulations is an ongoing project and one that is constantly evolving. It makes sense, then, why so many large institutions still struggle with it. Many simply lack the automated data management practices that would help them to be successful.
The need for good data management
Coming out of the 2008 financial crisis, many of the regulations that were applied to the financial industry have a similar objective: to increase the transparency of organizations’ data in order to monitor and mitigate risky decision-making. To increase oversight and transparency, today’s financial institutions are responsible for collecting, validating, and reporting on an increasingly complex amount of information. This requires top-notch data management practices to ensure that information is readily available and fit for purpose.
But when it comes to achieving compliance with burgeoning regulations, financial institutions are at varying levels of readiness. The global systemically important banks (GSIBs), for instance, have been dealing with strict regulatory requirements for years now, and they have entire departments working toward compliance. Smaller banks and credit unions, on the other hand, have been largely unaffected by these recent changes and have less sophisticated compliance departments. Eventually, though, these regulatory requirements will make their way down to the smaller institutions, and they will need to fall in line.
That’s why prudent financial services organizations should learn from the data management practices pioneered by the GSIBs, and begin to implement their own data management programs. To learn more about these specific regulations' impacts on data management, check out our white paper, Playing data defense: A look at financial regulations' impact on data management.
Implementing a data management program
Data management is integral to your financial institution’s ability to remain in compliance. To help get you started, we’ve put together some tips for implementing a data management program at your organization.
Without a proper data management strategy in place, financial institutions will struggle to deliver the true transparency that regulators require. For financial institutions, bad data can result in hefty fines from regulators and possible litigation, depending on the severity of the infraction. However, with a proactive data management strategy in place, financial institutions can be better positioned to comply with regulations when they inevitably trickle down.
Learn how you can embrace a proactive data management program to meet financial regulations by downloading our latest white paper.