Risk Management and Compliance Drive Improvements in Data Management
Improvements in client and counterparty data management have three new principal drivers, according to an international survey by the A-Team Group. Risk management, compliance and business development are the main reasons that financial institutions are now pushing to improve the aggregation of their customer and counterparty data, showing a more proactive approach to risk management and compliance. The research, commissioned by GoldenSource Corporation, focused on the growing importance of linking counterparty data into the securities master and found that financial institutions are moving away from traditional functions, where client or counterparty information simply directs credit worthiness and after-the-fact performance, with almost nine out of 10 respondents seeing compliance as the most important reason for aggregating customer data, followed closely by risk (73%). The research shows that an integrated approach to counterparty and customer data is seen as crucial to accurately measure exposure, risk and profitability as it allows a view of relationship hierarchies for roll-up. It also found that managing operational data such as standard settlement instructions is one of the largest operational headaches as it still has a large manual component (36%) even though third-party data providers are utilised (24%) and internal systems are in place (40%).