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Another Lehman’s legacy: connecting the data dots

Look back to Lehman’s and regulators uncovered 2,985 legal entities operating across 50 countries. No one understood their counterparty relationships with the rest of Wall Street or across the globe. Clients were locked up in a failed institution. Authorities were left confused and markets panicked over which institutions were exposed. Mapping legal entity data remains a challenge.

Enter Dodd-Frank, EMIR, FATCA and KYC compliance – the round of regulatory initiatives aimed at demystifying the data related to counterparty risk and legal entities. A common aim is to determine the relationships of the different data sets fragmented across silos. To map out those connections,  hierarchies and lineages.

When Lehman’s defaulted, quickly mapping out all of the exposures across jurisdictions became impossible. Picking through this internal, reference and entity data was akin to pulling at a ball of string. It shouldn’t be this difficult. The answer is to take a holistic view of information from a single aggregated source. How? With a central data hub mapping cleansed and validated data across multiple parties and jurisdictions.

The best bit? A consolidated view means organisations can reduce cost and risk while exploiting new ways to increase profits. Integrating all of the information together means business heads can quickly on-board new clients and identify opportunities to cross sell. Sifting through uncertainty is no longer the norm. It all comes back to looking at the big picture while retaining the ability to drill down into the details.

 

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