Managing data is not just an IT issue, it concerns all departments of a bank.
Many issues raised by the Board of Directors can be faced with a proper Data Management policy.
Improving operational and market risk management
Recent major frauds as well as the current financial crisis prove again that investing in better market risk management processes are a priority.
SmartCo DataHub offers solutions that help :
- In reducing the operational risk:
- by automating processes around critical data currently handled manually
- by improving the quality of managed data, especially around the securities pricing issues
- by making information available faster
- by creating consolidated repository on which risk analysis monitoring and reporting can be done .
- In reducing the market and valuation risk:
- by providing the capacity to compare market & reference data coming from different providers / sources
- by providing a repository able to manage the information on any kind of financial products, including structured products, credit derivatives
- by providing a unique data center containing all the information on securities and business entities that analysts need for risk purposes
- by providing a better view on the risk represented by partnering business entities (what is the risk on this bank, considering it as an issuer of securities, but also as a customer, a counterpart, as a custodian partner, as part of another entity group)
- by providing a consolidated view of all the transactions and positions held in all the different departments of the bank.
The current architecture of the market data systems in many financial institutions is expensive to support and maintain. Banks are not able to comply with new financial data needs rapidly and within reasonable budgets. SmartCo DataHub enables the reduction of costs:
- by automating processes currently handled manually, therefore improving the productivity of the data administration / risk / middle office / back office teams
- by optimizing the cost of data acquisition with data vendors
- by replacing numerous complex and expensive interfaces and data warehouses by a single application parameters driven requiring minimum administration resources.
Reporting, compliance and legal issues
The current pressure from regulators to optimize data quality and data management across the financial industry is a great challenge. On one side, the already existing regulations need a correct implementation that should always be considered as improvable (Sarbannes-Oxley, IFRS, MIFID, Basel II, and local legal compliance). On the other side, the recent crisis on the financial markets will lead undoubtedly to new regulations.
Correct management of all critical data, and especially securities prices and entities risk information is required to face potential new demand. Furthermore, regulatory reporting is increasing and it is a challenge for financial institution to deliver effective data metrics and enhanced compliance.
In order to increase their activity and business, financial institutions have created more and more complex financial instruments and mutual funds. There are a large number of data providers and a growing need for vendor data screening and data quality. It has become critical to centralize and manage this volume and diversity of market data.
A quick time-to-market for launching new activities is a competitive advantage. Having a centralized and flexible market data platform able to integrate new types of data without delay is critical.
Mergers and acquisitions have exploded in the banking industry. Banks are growing as well as the number of IT systems. It is now a difficult technological challenge to connect and interface all these systems the ones to the other and to centralize the information.
Instead of migrating different systems into a single one, which is always a long and expensive project, why not just consolidating the data they receive and they produce into a single database that will be the main contact with other systems? Existing processes do not have to be changed, users will not lose their habits, and business units will remain autonomous, still allowing synergies around the centralization of transversal services (risk, securities management, accounting, internal reporting, and legal reporting).