27 March 2015

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Data Management 101

A community blog about data and how to manage it

Technology in Banking

08 August 2010  |  4797 views  |  0

Technology applications enhance efficiency and make it possible to adopt the principles mentioned above. Technology is rapidly advancing the ability for financial institutions to leverage a central data repository containing all customer data with STP capabilities, which can then be integrated with semi-automated workflows. Acquiring the appropriate technology that provides easy access to updated data may enable a financial institution to keep a more watchful eye on its portfolios, identifying trouble spots early on and potentially preventing a crisis. Data is the foundation for successful credit evaluation, given that credit risk analyses and financial projections must first and foremost rely on the quality of the underlying data to render the correct results.  Moreover, the quality of assumptions that go into financial forecasting or stress testing is heavily data dependent.  The recent past has clearly shown that envisaged scenarios need to go beyond historical events and the basic first step is to capture historical data at a granular level and interrogate its risk capacity.

With the amount of data growing rapidly across individual institutions, whole financial systems, and global regions, it is imperative that financial institutions take the initiative to institute a data management process.  This investment can be of high value, touching many points in the enterprise for purposes of managing credit, marketing, segmenting, managing risk, establishing capital goals, and stress testing. This concept makes the investment in data management worthwhile to the entire firm. The key, however, is in turning data into knowledge.  Analysis, based on data, is being utilised to provide risk scoring, financial forecasting and stress testing processes.  Data is being transformed into knowledge that is then broadly understood across the financial institution and effectively communicable to regulators.  A state-of-the-art consolidated data repository demands less of an effort for managers dispersed about the firm to retrieve information that exists in databases and systems in a straightforward manner that is pertinent to their individual roles.

The ability to manage ever greater volumes of data more effectively and to retrieve stored data more efficiently is one of the key success factors that can differentiate it from its competition. The successful financial institution must have integrated systems to allow for greater interoperability between departments and across lines of business. 

TagsRisk & regulationPost-trade & ops

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