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Growth, risk and compliance: Taking a strategic approach to managing reference data

 

Background

 Co-authored by Deloitte and SWIFT and with contributions from Chief Data Officers across the industry, this paper outlines the pervasive impact that poor reference data can have on organisations and makes the case for a strategic approach to managing reference data.

 

With impact on growth, risk, and compliance, some organisations can see the competitive advantage to be gained from having confidence in their data and, as a result, are appointing Chief Data Officers to ‘police the numbers’. The introduction, driven by the G20, of the common legal entity identifier (LEI), used to identify parties involved in a financial transaction, will have a significant impact on regulatory reporting but could also be the catalyst for firms to take a more strategic approach to data management.

Key findings

While the driver for spend on reference data programmes is often regulatory, the impact of poor data is much more pervasive:

  • Organisations are demanding increased risk transparency, particularly around the more complex structured products. Chief Risk Officers and risk functions have ever greater influence and are driving demand for accurate and timely data.
  • Analysis shows that improved data can release 1-6% of Tier 1 capital. Taking a conservative average of 2%, this represents £17b in capital across the largest EU and US banks.
  • Margins on vanilla product execution are being squeezed and there is an ever increasing need to reduce transaction costs.
  • Understanding the individual needs of clients and being able to cross-sell/up-sell drives growth and requires accurate information about the client and products held.
  • Improved data management supports the ability to quickly and economically enter new markets and products.
  • The financial crisis has led to an ever increasing regulatory burden with significant requirements on accurate and complete data.

Contacts

Paul Garel-Jones
Director, Financial Services

Shabdeep Mann
Director, Financial Services

Stephen Ley
Partner, Financial Services

David Myers
Partner, Financial Services

Download

Download Growth, risk and compliance: Taking a strategic approach to managing reference data

 

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