Compliance with new and ongoing regulation and standards efforts has become a major factor in data management and operations. However, with increased attention to unification efforts, data governance itself has become an equally important factor for all financial institutions. Specifically, insurance companies and asset managers discovered in Solvency II and Basel III preparations that these compliance processes are the new normal in generating high quality data.
2015 was the year data governance became a top priority
As they prepared for these new game-changing regulations, many insurance companies learned that their buy-side asset managers and investment vendors were not up to the task of providing them with the necessary data to fulfill new regulatory compliance efforts. These vendors were also not equipped to complete full data governance processes, which in turn meant that they could not transform or handle data as required under new regulatory bodies.
Therefore, with more attention to data governance, stronger governance, planning and standards have become top priorities for many asset managers to incorporate into common processes. In fact, according to the “2015 RIMES Buy-Side Survey,” of the 400 industry participants from 160 asset management, custodian, pension fund and insurance firms, 67 percent of respondents were focused primarily on the improvement of data quality, which represented a 24 percent increase from 2014 . Furthermore, only 45 percent of respondents ranked cost as the primary driver of data governance, which decreased from 57 percent the year before.
Data harmonization from trusted sources is the new goal
Well-defined and managed data from trusted solutions has become essential to business practices in 2016. The harmonization of data and collaboration with regulators will enable insurers and asset managers to simplify the regulatory requirements, which will improve data standards at a granular level.
The chief data officer position now has a broader impact
With the regulatory and compliance shifts, chief data officers went from non-essential luxuries for financial services institutions, to become obligatory hires. The data management demand makes it crucial to operations and business decisions that a chief data officer control and manage high quality data systems.
High quality data compliance procedures represent an opportunity
Ultimately, new regulations are a positive development for both financial institutions and clients. According to a Waters Technology interview with David Blaszkowsky, senior vice president of State Street, the increased awareness of data governance ensures that insurers and asset managers have the potential to better serve their clients and reduce complexities, among other advantages.
“For the best of us, who were always managing our data to the highest quality, there will be huge opportunities to further improve our business models, our products, and how we serve our clients,” Blaszkowsky explained.