RDA: do the responses stack up?

  • Paul McPhater , COO enterprise software at Markit Group Limited

  • 04:00 am
  • risk , data aggregation

In a similar vein to the BIS’ recent progress report on BCBS 239, Markit commissioned its own survey. 29 global banks responded. So what difference did it make to the results when it’s not a regulatory body asking the questions? Are the answers perhaps less guarded and more honest? Or do the answers stack up?

We know from the BIS progress report that compliance gaps are clearly apparent. 14 of the respondent 30 banks, up from 10 in the previous year’s report, indicated that they will be unable to comply with at least one principle by the January 2016 deadline. Of the 29 major financial institutions in Markit’s survey, 17% stated they were still 31-36 months away from reaching aspirations for BCBS 239 with a further 14% still 25-30 months away.

Data is at the heart of bridging these gaps and complying with the principles – being able to deliver reports is irrelevant if the data going in isn’t the right data. Let’s keep in mind the fundamental 239 principles of completeness, accuracy and integrity and comprehensiveness . Having these drive your efforts will result in making source data and mastered data pivotal to any successful risk data aggregation. Only 7% of respondents to the Markit survey are fully satisfied with their ability to compare data attributes across different sources, with 34% pointing to significant investment still being needed in this area. The ability to do so will be essential to meet the accuracy and completeness requirements. There is also some way to go before the banks can claim to be sufficiently efficient in matching any type of data in order to create master data. 45% of respondents still require significant investment in this area. With only a small percentage of of the surveyed banks fully efficient in modifying their master data, it is likely to create discomfort for those wishing to fully understand map their risk data universe for compliance purposes.

The journey of data is also critical to know – who touched what, where and when. Proving data lineage under BCBS 239 is challenging –something to discuss further at a later date. So how satisfied were the banks surveyed with their ability to prove data lineage? A solid 10% were very satisfied with their abilities in this area. But a massive 55% still had room for improvement with a further 35% requiring significant investment. Data lineage is one of the cornerstones of risk data aggregation and it is clear there are still many questions to be answered.

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