Regulatory reporting requires that diverse data from across the bank be brought together quickly, which can be extraordinarily expensive and resource-intensive. From 2009-2014, reporting challenges led to $204B in fines, even with financial firms spending over $4 billion a year on compliance. Managing diverse data for regulatory reporting is a multi-tiered challenge for today’s banking industry.
The Data Diversity Bottleneck
One of the most complex challenges involved in compliance is normalizing data that exists in various formats from various sources. Modern banks employ an increasing number of data repositories, ranging from older mainframe systems and traditional data warehouses to disparate Excel spreadsheets, Hadoop “data lakes,” and everything in between. These systems support multiple business lines, and often don’t integrate outside of regulatory reporting processes.
Data preparation is typically performed using manual processes that are poorly documented and can be misinterpreted, not just by management, but by siloed, cross-functional teams. In many cases, these processes use different customer and product identifiers, different aggregation hierarchies, and different data formats, which then produce inconsistent results that are cumbersome to bring together. Pulling together this data on a timely basis becomes extremely difficult and expensive—a critical issue when many regulatory agencies demand monthly reporting.
Adding to the data diversity challenge is the need to make specific adjustments to data according to the needs of a certain regulatory body (requirements which are not always the same). For example, a bank whose analysts have tagged certain positions as “bank desk” may need to reclassify these as “leveraged loans” just to meet the nomenclature requirements of a particular agency.
A Growing Challenge
Numerous new regulations both in the U.S. and Europe have increased the demand for better, faster reports, some of which are near real-time, requiring reporting mere days after an event. One example is BCBS 239, a standard that describes robust data aggregation principles for Globally Systemically Important Banks (G-SIBs) and Domestically Systemically Important Banks (D-SIBs). BCBS 239 requires banks to simplify, modernize and fully document their data systems; in effect, to guarantee the accuracy and timeliness of data aggregation, while improving risk management practices across the financial sector.
Answering the Challenge with Trifacta
Trifacta is a comprehensive solution to the challenge of reporting against diverse data, enabling banks to:
- Automatically recognize diverse data types and attributes
- Immediately identify data quality issues such as outliers and missing values
- Quickly shape and aggregate diverse data formats using clicks, not code
- Accelerate the process of joining disparate data sources together with intelligence
Learn more about how Trifacta has reduced time to reporting for the world’s leading financial institutions.