Regulatory compliance costs eat up nearly 20% of a financial services company’s “run-the-bank” cost base, and 40% of “change the bank” costs for projects currently underway. BCBS-239 and Dodd-Frank help protect consumers, but require investment to manage at scale, putting pressure on banking sector profits. Failure to comply led to over $200B in fines from 2009-2014, as well as increased personal liability concerns for banking executives.
Regional banks aren’t immune either. A recent survey of American small banks released by the American Bankers Association found that more than 46 percent had reduced their product offerings, reduced staff due to regulatory compliance burdens, and that their customer service is lacking as a result of their struggle to comply.
Nearly 41,000 regulatory updates were made in 2014 alone, and today’s volatile political landscape shows no end to the turmoil. As a result, nearly 90% of financial services executives plan to increase their investment in regulatory compliance. Market leaders in banking have already begun to design and implement data strategies that are both flexible and scalable.
Data Strategies for Compliance At Scale: Best Practices For Market Leadership
Data Lineage Documentation
At the heart of financial services compliance regulation is the tracking of data, used to report on a firm’s performance and its transactions, as well as those of their customers. Each time the data is “transformed,” that is, whenever it’s adjusted, moved, or included in a calculation, an electronic trail must be created. Most firms comply using manual spreadsheet tracking in Excel, a process that is slow, prone to error, and difficult to scale for today’s enormous data sets—especially for global banks with compliance needs that vary by country.
Speed to Insight
Forrester reports that over eighty percent of the time spent by data science teams is on the extraction, cleaning, and preparation of data, referred to as “data wrangling.” When business analysts and compliance professionals can wrangle the data themselves while preserving the source lineage, firms achieve insight —and compliance—faster.
Agile Analytics Infrastructure
As described above, any data strategy for financial services compliance must be flexible, not only to adjust to changing market and regulatory conditions, but also responsive enough to assist business units to grow the top line. When data strategies are supported by an agile analytics infrastructure—one that’s able to support multiple, complex sources, saving time and money—then it’s great for the bottom line.
Trifacta: Enabling Flexible Compliance Data Strategies At Scale
Trifacta has a deep-rooted history in solving data challenges in the financial services industry. To learn more about how Trifacta is being leveraged at some of the world’s biggest banks to manage and prepare data for compliance, read our brief on using Trifacta for regulatory reporting.