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Financial institutions are recognising the benefits of harmonised approaches to data management, enabling them to leverage data commonalities that exist across multiple global regulations. The major benefit identified by 79 per cent of respondents was consistency of data across the business, followed by organisational efficiencies (63 per cent), cost savings (50 per cent) and a reduction in data sources used (44 per cent).
These findings underscore a shift in the mindset of leading financial institutions with respect to regulatory data management. The report, titled “How Financial Institutions are Leveraging the Data Commonalities Across Regulations: The Case for a Harmonized Approach to Regulatory Compliance,” looks at the changing regulatory data management approaches of leading investment banks, asset managers, asset services and insurers. It provides step-by-step guidance for cost-effective compliance, across the board and the globe, for the range of regulations aimed at reducing systemic risk that impact their businesses, including MiFID; AIFMD; Basel III; Dodd-Frank; EMIR; FATCA; IFRS; Russian Sanctions; Shareholding Disclosures; Solvency II; and more.
According to the report, asset managers are currently the frontrunners in terms of progress. They lead the pack as the type of institutions most likely to have a strategic regulatory data management approach in place. Banks, insurers and asset servicers are beginning to change their mindsets, operating with a strategic approach to some, but not all, regulations. Geographically, financial institutions in Asia-Pacific are more likely than their European and North American counterparts to have consolidated regulatory data management models in operation.
The Thomson Reuters report is released as financial institutions face increasing pressure to comply with multiple and varying regulations. The pace of regulatory reform in recent years – coupled with high penalties for non-compliance – has left many institutions ‘firefighting’ when it comes to organising the data and information required to adhere to new rules.
The report shows that change is on the horizon. With many regulations requiring similar or complementary data sets, organisations are re-evaluating existing regulatory information and workflow arrangements with a view to consolidating current content and developing a more harmonised approach.