Perhaps in an effort to improve data governance strategies and facilitate effective compliance management techniques, a half-dozen banking institutions have agreed to establish a centralized customer data register.
The banks – which include JPMorgan, Citi, Bank of America Merrill Lynch, Commerzbank, Societe Generale and Standard Chartered – signed the agreement with a financial institution called Swift, which is headquartered in Brussels, Germany. Known internationally, the company assembles and disseminates data in order to assist banks with their analysis of how much risk they can assume when making loans to other companies and entrepreneurs.
Pascal Auge, head of global transactions and payment services at Societe Generale – one of the six banks that will be included in the centralized data collection hub – indicated that one of the challenges of data management is being able to effectively “know your customer,” or KYC for short.
“Having a single, centralized registry for up-to-date KYC information will reduce the time, effort and cost related to gathering, accessing and sharing KYC information,” said Auge.
David Fleet, a managing director of client due diligence for a British multinational banking company headquartered in London, told Computer World UK that this latest initiative will be a great vehicle for virtually all buy-side financial institutions, specifically as it pertains to risk management.
Due diligence is critical to buy-side companies’ success
Compliance management is more than a buzzword in today’s data management climate, as many banks and hedge funds have committed significant resources to tools that can help companies abide by regulations that are in place.
“Buy-side firms already operate within a highly regulated environment,” said Andy Knowles, head of compliance services at RIMES Technologies.
Just how significant and broad-based these obligations are, he added, may come as a surprise for those new to the industry. Data governance can help make these compliance requirements easier to handle.
“Data governance is paramount to ensure that data used for compliance and regulatory reporting is accurate, appropriate and complete,” said Knowles. “Data management has moved beyond a ‘nice to have’ and is now a regulatory necessity.”
He also pointed out that compliance isn’t just something that only particular segment of a business has to be aware of and track. It’s a mindset that everyone has to be on board with, as true compliance can’t be achieved piecemeal; it has to come from the collective.