Compliance Through Governance: A Pragmatic Approach

Ninety percent of Banking and Financial Institutions worldwide are struggling to meet stringent regulatory compliance measures involving data audits (Basel I, II, III, Risk Data Aggregation, HIPAA, SOX), data standardization, and achieve excellence in data governance. The new age of heightened regulatory scrutiny, combined with the slew of new regulations means the BFSI sector is faced with a daunting challenge to meet the requirements or pay hefty fines and penalties. Both paths speak to the time consuming and costly nature of regulatory change, and only those with the best approach will emerge relatively unscathed.

The Key to the Future in Banking and Financial Services lies in the ability to adapt and evolve.

While meeting regulations at the pace required by the powers that be is more of an adaptation, staying compliant is an evolution. The key to the success in the near future of the BFSI Sector will correlate with how quickly companies can adapt to regulatory changes that are known, but perhaps more importantly those yet to come. Clearly the advantage goes to those who can quickly and accurately take action, which is easier said than done in any medium to large corporation. At the root of most regulatory requirements is data – those who can manage the data and use the data to tell a story will win. Today, many struggle due to lack of process, governance, and visibility in how they manage data – not to mention that growing volumes only compound these issues. A precise orchestration of people, process and technology are required to effectively manage data that tells the story, withstands the audits, and can quickly be adjusted to account for new requirements. Many times, money is not the issue – budgets are opened in lieu of fines and penalties, the best people are put in place, but too often institutions rely on the tools they know, and try to force-fit them into new processes with little evidence that it will somehow solve their systemic issues.

Like it or not regulatory compliance is here to stay

Some banks have resolved to pay the penalties rather than endure the pain of fixing their problems – unlikely as that may seem, it is true. The word “BASEL” in some circles will evoke emotions and foul language. Unfortunately, given that it is unlikely that these regulations will ever go away, or even diminish slightly, the cost of ignoring them is high, and recurring – so this clearly is not a sustainable approach. Most Banking and Financial Services Organizations realize these regulations are here to stay, and will only grow – these companies are on the path to seeking solutions, empowering the brightest minds to find a way, while being mindful of the unforgiving clock. Their solutions need to provide agility, visibility, flexibility, and repeatability in nearly all cases.

Meeting the challenge of regulatory compliance

While some will seek to put solutions in place to ‘stop the bleeding’, the best will put solutions in place that create a competitive advantage. Those that truly understand that the answers are found in the data and data management processes will quickly conclude that accuracy and sustainability are both driven through data governance.

Strong and comprehensive data governance forms the foundation for nearly all regulatory compliance challenges. Data Governance in itself is a form of regulatory activity – which can often meet with the same sort of resistance among IT workers and their business peers. So how then do we solve one set of regulatory compliance issues at the global level, with another set of compliance issues at the IT organizational level? The answer lies in making it easy, or as we call it “Passive Governance”. Passive Governance is the sugar coating on the bitter pill that makes it all easier to implement, and sustain. Removing the conscious thought by incorporating steps into the day to day process makes for sustainability. Passive Governance can be thought of as a “design feature” like a backup alarm in your car or a seat-belt alarm that reminds us that we need to follow the process, but usually only when we forget. Incorporating tools that have built in Governance Features to make processes and activities become second nature is among the best and easiest steps to take, and depending on the vendor, it can also be very cost effective and include not only great ways to manage the implementation of governance practices, but also data quality initiatives that are strategic and ongoing.

Too often, organizations attempt to improve their governance by putting in place data stewards, who become “rule makers and data police” and are quickly dismissed, or they focus on improving data quality, not through understanding the upstream issues, but by focusing on more testing – in both cases, using techniques that have been in place for years, and have proven ineffective. Homegrown tools and processes can be effective, but if a company finds itself in a situation where their data cannot be trusted, or effectively audited, and their governance program is viewed as ‘rule making without a cause’, chances are they need outside assistance or new options for solving these systemic issues. The quickest measure is to use purpose built tools to achieve the desired results, combined with leadership support to achieve the transition. Organizations that are serious about not only adapting, but evolving, will understand the need for an enterprise approach to meet data governance and data quality needs that includes a “full-circle” approach to profiling, cleansing scoring and data mapping with true automated enterprise lineage and impact analysis capabilities – which are all “passively governed” as part of the process and daily use.

The challenge of regulatory change in banking and how to meet them:

For financial institutions of all sizes and services, successfully meeting regulations and data governance challenges will require the automation of legacy processes while simultaneously making improvements in 6 key components:

  • Data Governance
  • Data Quality
  • Unified Business Glossary
  • Metadata Management
  • Data Lineage
  • Impact Analysis

While data management is inclusive of many more disciplines and activities than these 6, these can be mapped to the ability to meet requirements. Organizations that face these challenges and are looking for a great place to start with a Unified Platform that enables these key components can start with AnalytiX Data Services Unified Platform for Data Governance. Necessity is the Mother of Invention – This platform is mature, and the work and feedback of our broad spectrum of clients seeking to solve the same problems. See how true innovation can change the game and put you on the road to compliance.

Contact AnalytiX Data Services for a full, live demonstration that takes only an hour to show you how bright your regulatory compliant future can be! See for yourself:

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