21 December 2014

Regulatory Client Onboarding

Marc Murphy - Fenergo

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Data Management 101

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Using Client Onboarding to Improve Data Integrity

24 July 2012  |  4353 views  |  0

Client data and reference data management are topics that are very much in the spotlight at the moment as global regulators move to introduce new legal requirements and more stringent standards (such as Legal Entity Identifier) to bring about greater data governance and improve the overall quality and integrity of client data.

However, with so many regulations emerging from all corners of the world, each dictating a different level of compliance standard, financial institutions are struggling to navigate through this regulatory maze and remain compliant.

This is where client onboarding can help. Its ability to introduce new client data and documentation into the bank (along with cleansing, remediating and updating it on an ongoing basis as the client moves from initial onboarding to new account opening and regular client reviews) makes it the perfect candidate to enhance data quality and integrity.

And it doesn’t stop there. Client onboarding can also play a more advanced role in ensuring the continued authorisation and security of client data. By being able to prove that the right people have the right levels of access to the right pieces of information, client onboarding can safeguard the integrity on client information.

With a little help from onboarding solutions that can handle enhanced entitlements, client onboarding teams should be able to implement and govern varying levels of control over data access and transmission easily enough.

Quite simply enhanced entitlement is a rules-based functionality that enables banks to set different levels of permissions to do certain things with particular pieces of client data based on specific criteria. This means that banks can achieve greater auditability and control over the data being viewed, created, edited, deleted and updated in accordance with new data protection and regulatory compliance obligations, many of which are subject to in-country restrictions.

At a very high level, banks need to be capable of applying these varying levels of controls on employee access to data and match these permissions to onscreen functions. Access permissions can be based on:

  • Role of the individual within the organisation, business unit, functional team
  • Jurisdiction – restrictions on accessing data based on the country in which the client was onboarded and from which country the user is accessing it – subject to in-country data protection laws. For example, Japan’s data protection laws require specific and limited use of information, as well as adequate data security and integrity. In the client onboarding world, this means that other teams in other countries cannot view or edit in any way data of a client onboarded in Japan
  • Type of legal entity type being onboarded e.g. company, hedge-fund etc.
  • Product type e.g. Futures & Options, Equities, FX etc.

Implementing access controls in this way can enable banks to achieve greater peace of mind that their client data is secure and they are fully compliant with many different pieces of regulatory legislation. So, for example, if a user does not have view access to a specific entity (or subset of entities), they will not see records for that entity (or subset of entities) in lists, including search results and records within tabs e.g. a due diligence case.

Drilling down further, banks should also be able to set more complex entitlements based on more granular requirements. For example, if a user has view access to a legal entity, they can navigate to that entity instance but are restricted from all further actions e.g. open a legal entity screen or open a document.

By using its client onboarding solution to enhance and safeguard client data, banks can benefit from leveraging existing technologies and data repositories to enhance overall value and usability of client data. From here, they can seek to create a more complete financial picture of the client, helping them to maximise up-sell and cross-sell opportunities, as well as ensuring a continuous high level of compliance with a patchwork quilt of emerging regulations. 

TagsRisk & regulation

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Marc, CEO Fenergo, is a financial technology specialist with fifteen years experience developing, selling, and delivering enterprise software to banks and financial institutions. His responsibility is...

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