Data Integrity’s Central Role in Financial Compliance
In the wake of the 2008 financial crisis, waves of increased regulation created challenges for financial services firms worldwide. Companies are now mandated to implement increased proactive monitoring and reporting of trades and positions at a level of detail and timeliness previously unimaginable. While significant efforts are being expended to interpret and implement new regulatory rules, one thing has become clear… …any new regulatory oversight is only as good as the integrity and completeness of the underlying data assets of the firm.
However, a silver lining does exist. While improved data integrity can be viewed as a “stay-in-business” compliance requirement for modern financial service firms, improved data integrity also serves as an ROI multiplier by increasing financial services firms’ agility and context to quickly and effectively develop and deliver new products and services to market.
Increased regulatory requirements and compliance, most notably Dodd-Frank, have forced investment banks and broker-dealers to focus a great deal of energy and budget to create and maintain high-quality data assets in order to meet stringent reporting requirements. In the past, data assets were often ignored and taken for granted as the financial industry experienced robust growth in both revenue and profitability. However, regulatory demands have forced firms worldwide to reexamine their data assets. Regulation has brought firms’ data assets into the limelight for risk reporting and monitoring, but the interest in data continues to expand through all verticals of organizations. Investment banks, broker-dealers, and futures commission merchants (FCMs) have since recognized that adding structure and governance around their data assets enables strong data integrity, which can drive superior decision-making, create additional controls, and allow for adaptation to new regulatory rules and adherence to existing rules such as CFTC Rule 1.73.
Sagence’s downloadable white paper “Data Integrity’s Central Role in Financial Compliance: Maintaining Regulatory Compliance with Dodd-Frank Rule 1.73” provides a detailed case study of the specific impacts of data quality in this regard. Download it here.
Contributed by Jonathan Heigel.
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