CUBE, a global RegTech company working to simplify compliance for the world’s leading financial institutions, today announced the release of a new report entitled ‘Data: Poison or Cure?’ 

This global report, produced in partnership with fintech research firm Burnmark, explores the evolving possibilities presented by data within financial services, and asks whether it provides a solution to complex compliance.

The Covid-19 pandemic has forced businesses across the globe to change their ways of working, and financial institutions are no exception. In fact, this study of 160 global financial institutions points to digital acceleration and increased automation across the board in 2020. This increase in digitisation has led to an evolution of data, with different sources, uses and processes coming to the fore.  

Data has long been a buzzword in the financial industry – this report clearly illustrates its multiple practical applications. It shows how data is an important tool in the shifting landscape of financial transactions and regulation. It highlights the importance of the quality and integrity of data in order for it to be of any real value. It makes the point that data outcomes are only as good as the data you put into your systems  – there’s a lot of data available but the key is to utilise it to its full potential. 

Key highlights from the report include: 

- alternative data has had the biggest impact on financial institutions and regulation in 2020 and will continue to play a key role moving forward. The rise in the use of devices including drones and wearables, combined with information obtained from non-traditional sources is shaping the way financial institutions do business. For example, alternative data has allowed banks to increase the speed and accuracy of credit decisions by enabling the analysis of digital behavioural patterns. But this increased adoption of alternative data by financial players creates new challenges in regulation which will also need to be addressed.

- analytics is a powerful tool for regulation and can be used to prevent financial crime. Biometrics including facial, fingerprint or voice recognition is increasingly used to verify identities and prevent fraud. Predictive analytics uses statistics to determine the likelihood of fraudulent transactions. Machine learning can combat money laundering through analysis of customer behaviour and transactions. These are just some examples by which banks can use data intelligently and to their advantage.

- new ways of working have led to the creation of a new industry where RiskTech meets RegTech. Remote working has made compliance more of a challenge; but systems are getting smarter, leading to new adaptable and scalable products. The financial sector is moving towards a situation where one or a combination of technology tools will not only assess risk but also address regulation and compliance.

Ben Richmond, Founder and CEO of CUBE says, “2020 saw a seismic shift in how financial institutions conducted business, with data taking centre stage. Changes are continuing to happen in 2021 and the key is to stay smart and use the tools at our disposal. Data has the ability to improve the company and customer relationship – using it intelligently will help us transform compliance and navigate change.”

Devie Mohan, Founder of Burnmark says, “Good innovation and digital transformation is, in essence, a derivative of good data and data management. 2020 was a year where this has proven especially true, with data points, sources, analytics and tools evolving quickly to support much faster digital transformation than ever before. Intelligent and efficient use of data will undoubtedly continue to be a theme for 2021 as well.“

The full report can be found here, which includes interviews with Jonathan Holman, Head of Digital Transformation at Santander; Rav Hayer, Digital and Data Analytics Partner at PwC; Sylvia Yarbough, financial industry and compliance industry expert; Linda Gibson, Director, Head of Regulatory Change, at BNY Mellon|Pershing.