There is a data deluge in the Financial Services sector. New regulations, requirements, and sophisticated analytical tools have conspired to drive huge demand for richer, more abundant, and more readily available data.
For you, the Chief Risk Officer, this is proving to be both a blessing and a curse. In risk, data is knowledge, and knowledge is insight. These growing volumes of rich data can help you learn more than ever before about business practices and make identifying potential areas of risk extremely simple.
On the flipside however, more data is a greater risk in and of itself. All of that extra data is valuable, and if it’s not being managed properly between different silos and lines of business, it’s not just being underutilized—it’s vulnerable.
It can make your life much easier or significantly harder depending on how its managed, and if you want to consistently turn rich data to your advantage, you must align accounting, risk, and financial processes to ensure all data is collected and managed in the best way possible.
The key to great risk data
The difference between “acceptable” and truly great Risk Data Aggregation and Reporting (RDAR) is in how the data is collected and managed. If data is siloed or unavailable to key stakeholders and risk-assessment staff, it loses most of its analytical value.
But if you can break down the silos and collect and collate data under a single management pane of glass, you can simplify reporting, and put yourself in a better position to spot areas of risk and profit-opportunities.
Overcoming the barriers to risk reporting excellence
With that single view and unified platform for enterprise data in place, the next step is rolling out new governance policies to ensure that everybody across all departments handles, captures, and stores data correctly using the new system.
To do this, you’ll have to work closely with the Chief Data Officer. They have the final say on data policy and governance, and only by discussing what you want to get from enterprise data with them will you be able to ensure that the right practices are enforced enterprise-wide.
The CDO will also be able to help you integrate your risk data aggregation and reporting systems into your core data platform, so that it can effectively utilize fresh, timely data from all departments and lines of business.
Surprisingly, despite it’s clear benefits, few FIs have managed this yet. A recent study from Chartis on Risk Data Aggregation & Reporting Solutions found that only 7% of surveyed organizations had integrated Risk Data Aggregation and Reporting systems into other business areas.
Building lasting partnerships with top data stewards
As Chartis summarizes in its report: “The trinity of the CRO, CDO and Big Data should be at the heart of how FIs approach business, and they should all be closely aligned.”
Building a strong relationship with the CDO and working with them to improve governance and data management standards across all departments—especially accounting and finance—is your key to better data-driven risk management.
During this process, it may also be beneficial to meet with different lines of business, especially accounting and finance, to discuss why you’ve put a new data management platform in place and created new governance policies to support it.
By helping them understand your motivations, and how better risk management will benefit their department in the long term, you can get the kind of enterprise-wide support and alignment that you need for new initiatives like these to succeed.
Good governance demands good technology
Aligning essential data stakeholders and processes across your organization is just one piece of the puzzle. Another is making sure your data and analytics technologies can handle the breadth of data generated by today’s FIs, and that you have the capabilities in place to effectively unify the data everyone is generating.
Take a look at how Oracle Financial Services Analytical Applications can help ensure your FI is ready to deliver consolidated, consistent and authoritative data across the enterprise, and take the first step towards eliminating risk with better visibility and reporting today.