To begin can you provide a little information about yourself and Virtusa?
Virtusa is a global business consulting and IT outsourcing company that combines innovation, technology leadership and industry solutions to transform the customer experience. Founded in 1996 and with our headquarters in Massachusetts, we have offices and technology centres throughout the United States, Europe and Asia. I lead the financial services consulting division of Virtusa; we deliver change initiatives within our clients in response to various pressures created by market and regulatory forces.
The regulatory environment seems to be in a constant state of change at the moment. What are the most pressing regulations facing financial firms at the moment?
That’s the problem with regulations, you have to obey all of the rules, all of the time. However, the majority of the concern comes from those rule sets that require financial services firms to “combine” or “collect” information in new ways. It is one thing to ask a client to sign a revised agreement that has a new paragraph and an entirely different issue when you need to collect two documents – or share the existing information across new sets of users and functions within the organization. FATCA is a particularly good example of how firms need to re-look at how they approach the onboarding of a new client (as well as deal with their existing ones). The requirements lay out a tiered approach to when you collect information and then what to do with it. To properly respond to the intent of the rule, one has to look at the full process and think about the input/outputs from scratch.
With deadlines fast approaching is it still possible for financial firms to achieve compliance?
Yes, but it all depends on how robust the response will be. 2014 has the potential to be a massive compliance challenge for European banks and financial services as they start to feel the pinch from new and updated legislations that they must be prepared for. The truly successful firms will find tactical ways to make the change while aligning the required long term changes with other long term initiatives (like reducing cost, or creating more flexible infrastructures). However, too often we see firms stop at “Phase 1” and never find their way to “Phase 2” or the even more preferred state of “Done”.
How can companies minimize the financial burden of achieving compliance?
As ever, when it comes to compliance, preparation is key; companies need to step away from “Compliance for Compliance’s sake”. If you boil down all of these initiatives, it comes down to transparency. Transparency can also be a business driver and lead to competitive advantages. The firms that can marry those aspects of their support model will find Compliance to be a “by product” of their innovation and segment leading services and not a distraction or added cost.
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Data privacy is major concern for financial institutions. How can financial firms effectively manage data and protect client information?
It is a major concern, as is the associated risks posed on the profitability and viability of financial institutions. The Basel II framework went some way in addressing this ‘operational risk’, however what it didn’t recognise is the difficulty that many banks have in trying to identify risks and capturing the necessary data. One solution that could potentially solve the challenge is Business Intelligence (BI). BI can provide information for better decision making, identify risks, perform trends analysis and to create a feedback loop for continuous improvement. Change is a given, including both the changes in risk and changes in data, and hitting a moving target is always difficult. But firms that implement solutions that understand where the data is and where it will be in time, stand the best chance of ensuring that client data is secure and protected, both now and in the future.