Data Series Insight 2: Changing the Culture
Following the financial crisis, the introduction of BCBS 239 (Basel Committee on Banking Supervision: Principles for effective risk data aggregation & risk reporting) started the ball rolling for improved data governance across financial services. Since then, MiFID II, Dodd Frank, FRTB and GDPR have all added to this data burden. Consequently, financial institutions have invested heavily in enhancements to their technology. Now, data, combined with technology, is considered the enabler of the future.
For too long, data has been considered the ‘poor relation’ in large financial institutions, however, it has grown into a behemoth,with millions of new data points added daily. We recently attended the Global RegTech Summit 2018, where data was repeatedly highlighted as one of the biggest barriers for successful RegTech implementations. What is clear: new Challenger Banks can steal a march on their more established competitors by the fact that they do not have this jungle of legacy applications and data without clear mapping, modelling and lineage. The lessons are out there in other sectors, such as the way Amazon, Apple, and Google collect and use data. Should these tech giants aspire to move into financial services, the power of the data that they hold will highlight the glaring deficiencies of the incumbents.
This evolution will not be easy; a seismic change across the industry is needed – but the time has come for data in it’s own right to be treated on parity with Technology Functions and Group Operations in financial institutions. This is both a cultural and enterprise wide change that should see data as an enabler to a successful future rather than a barrier to change.
In my next insight, we will focus on enterprise wide change, before subsequently focusing on how financial institutions can start to bring about this change…