Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .


Insuring against a future financial crisis – staying compliant and off the front pages

IT migration lessons learnt from the TSB crisis

By Grant Caley, NetApp Chief Technologist, UK & Ireland

As Brexit plunges the UK into an era of uncertainty – that in recent history can only be likened to 2008’s cataclysmic economic crash – the robustness and accountability of our professional and financial industries are once again confronted with the prospect of change. With hefty fines for non-compliance and the memories of reputational damage from the last recession still fresh, data protection, privacy and compliance are more important than ever, as companies seek precautions against another crisis.

Grant Caley

Grant Caley

The question is, have our retail bankers, insurers and equity traders invested in future-proof strategies to keep them compliant and their reputations off the front pages, if another recession were to hit? After all, as financial services undergo digital transformations, now is the time to build an underpinning data fabric, that reduces risk by providing enterprise data-security, protection, mobility and visibility, irrespective of where financial services data flows in this modern Hybrid Cloud world.

The 2008 financial meltdown was the worst to hit in almost 80 years,breaking records[i] with 312,000 company closures in the first year and then 492,000 in 2009. Newspapers were littered with accusatory headlines, hammering the financial services. Everybody suffered. Inquests into the chain of events leading to the crisis were established.

And so, the banking industry was tasked with taking a long hard look at itself:closely examining the cause and effect to ensure institutions safeguarded investors, debtors and their future reputations. Regulation was badly needed in order to guarantee banks had enough capital to pay out to debtors in the face of another financial down-turn. The result was a three-pronged set of regulations, from EU-based legal and industry institutions – shifting the focus to the creation of regulated reporting against specific metrics, on a massive scale.

As the term ‘double-dip recession’ planted itself in the nation’s consciousness, so the triple whammy of new and amended regulations sought to curtail any rogue elements within the financial sector.  Basel III is one such measure developed by The Basel Committee on Banking Supervision, to strengthen regulation, supervision and risk management of the banking sector. Its reforms target the resilience of individual banking institutions to periods of stress; as well as system-wide risks and pro-cyclical amplification of these risks over time.

Another measure is the Solvency II Directive 2009/138/EC, an EU Directive codifying and harmonising the EU insurance regulation. Primarily, this concerns the amount of capital that EU insurance companies must hold to reduce the risk of insolvency. The third measure involves the amendment of European Union law, known as The Markets in Financial Instruments Directive 2004/39/EC (MiFiD). This provides harmonised regulation for investment services across the 31 member states of the European Economic Area. Building upon its initial purpose, in part to regulate reporting and avoid market abuse, its 2011 evolution seeks to improve the functioning of financial markets making them more efficient, resilient and transparent.

Today, the financial sector is taking compliance with these established regulations seriously – some banks have as many as 20,000 employees tasked with compliance. But with three sets of regulations to potentially comply with, they could drive huge efficiencies by developing a single reporting platform, through which visibility of individual customer records and performance metrics can be applied to each regulation. This would ensure a consistent process for all compliance reporting, while ensuring the appropriate tools and data are in place.

By fully utilising a data fabric and embracing digital transformation, financial businesses could seamlessly transfer customer data between each of the regulatory buckets, freeing up capacity and saving time on a repetitive data entry process. More importantly, that mission critical data, including debt, mortgage and credit ratings, needs to be securely protected, making infrastructural investment essential.

While digital transformation and the application of a data fabric to banking compliance seems like a no-brainer, the distance between procurement and IT infrastructure means the solution is not being fully grasped. On the one hand the banking system is bending over backwards to meet the stringent reforms, investing in a large workforce to ensure compliance is met. The threat of another fall out economic or reputational is unfathomable. Yet, procurement seems blissfully unaware of the IT solutions that lay quietly under its nose, contained within the fluid possibilities of a data fabric.

Ultimately, digital transformation lies at the heart of future banking compliance. With data and infrastructure increasingly shifting from a mere business formality, to a strategic asset – essential for any future-facing business with an eye for efficiency – investment is wise. Looking ahead to the murky uncertainty of a post-Brexit Britain, linking procurement and IT more closely together to really shore up compliance could protect banks from a total wipe-out.

Global Banking & Finance Review


Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!

By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post