Published : 8 years ago, on 14/01/2017

Kathy Andrews, director of Perceptiv at Recommind,now an OpenText company, explores how to make the dream of simplified data management a reality

Dealing with the data deluge is a challenge nearly every global business now faces. In order to remain competitive in today’s market, companies are increasingly having to adopt a digital-first strategy and leverage valuable insights from the ever-growing supply of data at their fingertips. However, for many global businesses, this is easier said than done and for banks, in particular, the added pressure of tightening regulations is only making the task a much more complicated one.

Right now, the prospect of facing incoming regulatory requirements, the need for better data governance, and burgeoning big data is keeping CIOs in most financial institutions up at night. As such, many banks are trying to find more effective and efficient ways to process, manage and analyse their critical information so they can make the right decisions to optimise profit and remain competitive.

An uncertain landscape

In addition to an overflow of data, the banking industry is also currently facing uncertainty around regulations – particularly in the wake of the Brexit vote and the election of Trump. For example, the demands on financial institutions in terms of record-keeping, business rules, collateral management and security requirements outlined in the Dodd-Frank Act may well face significant changes given Trump’s desire to dismantle parts of Dodd-Frank. While the details of how Trump will do this have not been made clear, we can be certain that regulatory reform will happen in 2017. In fact, global regulators will come together in March this yearto discuss a host of controversial reforms aimed at making banks safer.

With all the new margin regulations rolling in, the question is how banks will prepare for the economic and operational impact and how they will consider which technology can ensure an effective, efficient path to compliance.

The digital opportunity

As the market continues to evolve, banks will undeniably find themselves needing to incorporate more and more complex rules into their processes. In this wave of changing regulatory standards, banks need to be prepared – taking the necessary steps to digitise now and making significant investments in technology and documentation processes to meet each new regulation.

The key for banks lies in the technological preparedness it takes to sift through thousands of counterparty agreements, including eligible collateral, interest rates, termination events, netting, thresholds, and independent amounts. Instead of handling data manually, banks need to look to adopt automated classification systems that allow employees to identify critical keywords within agreements by jumping to key agreement clauses and terms to rapidly understand contract implications.

Capabilities to get the big picture via a persistent reporting layer, through visualisation of contract terms and identification of trends across all contracts, enables institutions to prepare agreements for turnkey processing. Employees can no longer simply devote the time needed to review mountains of data in order to make individual decisions regarding the relevant agreements – but technology can. 

Moving forward, banks that adopt automated systems can then apply rules to their information, either with mass classification or specific attribute capture. Automating the way rules are applied simplifies data retrieval, not just for regulatory reporting, but also for eDiscovery processes, and general litigation.

The new digital gold standard

During 2017, the onslaught of frameworks and regulations is unlikely to let up. With a strong technology foundation, and the ability to leverage both structured and unstructured data flowing across multiple channels, financial firms can meet the demands of incoming regulations, and ensure sound data governance.While the impending regulations will be daunting to meet, new technology that automates legacy processes and further enables digital transformation can ensure an institution has what it needs to achieve legal and regulatory compliance.