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FSA fast payout rules signal data management challenge for banks

06 November 2009  |  6154 views  |  1 blurry people

The UK's Financial Services Authority has signaled a revision to its rule book that will require deposit takers to put in place appropriate systems to create and maintain a single customer view (SCV) to ensure fast payouts under the Financial Services Compensation Scheme.

The SCV proposals - which come with an estimated £1 billion price tag - were first aired by the watchdog in January last year. They are designed to ensure banks can provide a list of all customers' deposits within 48 hours of collapse, enabling the FSCS to ensure customers get compensation within seven days.

The latest set of revisions to the FSA Handbook, published Friday, confirm that the watchdog will seek to verify and supervise deposit takers data management efforts in the run up to an end-2010 implementation deadline.

"These rules will require deposit takers to submit periodic information on the status of their SCV development, including pre-implementation reports, implementation reports, SCV reports and the provision of sample data to the Financial Services Compensation Scheme," says the FSA.

The rule changes will require a mammoth data cleansing exercise, with firms required to ensure the existence, completeness and accuracy of all data for each depositor across multiple lines of business.

Tom Scampion, partner in Deloitte's information & technology risk practice, comments: "Certainly, the volumes of customer data held by the financial services industry are well documented. Equally well documented is the challenge organisations have in managing these volumes, as demonstrated by high-profile data losses in recent years. Gaining clarity across brands and departments internally is key to achieving the targets set out by the FSA."

Finextra verdict The industry may groan, but this is one regulatory change that may ultimately prove to offer competitive benefits, as banks piece together a more rounded view of their business with customers. Data held in the repository can be re-used and channeled back to front-line staff where it can offer valuable intelligence and insight, leading to more informed conversations and cross-selling opportunities.

Comments: (1)

Simon Harper
Simon Harper - Harper Richardson Partnership - London | 09 November, 2009, 08:41

Definitely agree with Finextra comment - progress towards enterprise information maturity!
This regulatory drive towards information quality will lower risk by having customer and transaction information in one view, breaking down the siloed views that traditionally exist and at the same time promoting a better customer experience and promote relevant customer opportunities - all traits of an SCV!

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