Gain Insights into Current Trends and Challenges Impacting the Financial Services Industry

How the CFO can Prepare for the Future of Financial Regulations

Jenna Danko
Product Marketing

The rules and regulations placed on financial institutions are constantly changing, and trying to adapt and ensure you’re compliant with them all is far from a simple task.

Preparing for changes in advance is difficult, as nobody can truly predict what’s coming. But if we look at what’s happening to the world’s largest banks, we can gain some valuable insight into what the future might hold for all financial institutions.

BCBS 239 and beyond

For the GSIBs at the very top of the financial services industry, a new set of regulations and requirements has brought major changes to the way they manage data governance, and look at their enterprise data infrastructure.

Within BCBS 239, GSIBs have been asked to comply with a number of strict new regulatory requirements that go beyond the data itself and instead look at the company’s data management infrastructure, data lineage, and governance practices.

The motivation for this is clear. To fully ensure data consistency, you have to look beyond how specific data is being handled—you have to address issues with the big picture, the entire data infrastructure, and the impact it is having on the quality and security of that institution’s data.

What does it mean for the rest of the world’s banks?

Leading with these new principles makes sense, as it is enabling regulators to eliminate data issues at their source instead of just fighting fires as and when problems occur. It’s a bit like the “teach a man to fish” proverb. Regulate a company’s data and they’ll become compliant today, regulate their data infrastructure and they’ll become compliant for a lifetime.

With that in mind, it would also make sense if we saw those principles applied to all banks, in one form or another. If the world’s biggest banks successfully adapt to those new regulations, the regulatory environment could very quickly shift everybody’s focus towards data infrastructure and governance.

It’s not just a matter of compliance

While only a handful of banks are currently required to comply with the infrastructure and governance requirements outlined in BCBS 239, many others may want to consider meeting those standards anyway.

Those that have been pushed to comply are now beginning to see the real business benefits of a strong, integrated enterprise data environment, and the benefits go far beyond compliance. It’s making reporting, analytics, and risk far simpler to manage, and becoming a real source of competitive advantage.

For some other large banks that fall just outside of the GSIB catchment, adopting the same principles is becoming a necessary requirement if they want to keep pace with their competition.

So what can the CFO do about it all?

The CFO is highly experienced in dealing with regulatory requirements and ensuring that their company is compliant, and if they want to prepare for potential future changes, they need to start thinking proactively about what they can do to improve their data infrastructure today.

There are many ways to improve data management across the entire enterprise, but for many FIs, the first step is standardization.

To maximize data quality and ensure compliance with new regulations, it needs to be stored in a unified, integrated way that allows it to be accessed, analyzed, and shared with key stakeholders across the entire enterprise—and often outside of it. This means:

  • Standardizing the way you collect, handle and store data
  • Standardizing the platforms used to manage and store data
  • Standardizing across different LOBs and data silos
  • Standardizing the way data lineage is tracked and maintained

By doing this, you can create a single source of truth where you and your team can find clean, consistent and verified data that you can rely on.

As the CFO, it’s up to you to work closely with the CDO and the CRO to think “architecture first” and consider what changes you need to make to your data architecture in order to achieve governance and data quality excellence.

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