Financial institutions are constantly on the lookout for ways to improve their operational efficiencies, and what better way to do this than to use data already gathered for regulatory and compliance purposes?
The 2013 results of a self-assessment by banks showed higher compliance with risk reporting practices than governance and infrastructure capabilities. The banks reported facing challenges in setting up sound governance processes, and few considered themselves compliant in this area ahead of the 2016 deadline. Regulatory and compliance reporting functions are particularly difficult due to the high number of reports required, and this has become a significant cost factor for financial institutions.
The Silver Lining
Most clouds have a silver lining, however, and this is no exception. Once you have collected data for various regulatory functions, re-engineering the process with an enterprise solution that reduces the time and effort required enables you to reuse it to generate value in several ways:
- Improving Efficiencies
Enhanced knowledge of clients’ risk profiles enables you to customize your products for individual appetites. Through a better understanding of your customers’ banking patterns, behaviors and preferences, it’s possible to break out new customer segments and identify potential products to offer them. Overall, the data provides a more comprehensive view of your audience, which improves the chances of cross-selling and upselling successfully.
- Reducing Costs
Once data is gathered for compliance purposes, there’s no longer a need to incur the costs of gathering it for other business purposes.
By reusing data already collected, banks can limit their chances of duplicating data, and the confusion that stems from having more than one identical record.
Improved understanding of customer preferences enables financial institutions to target marketing campaigns more precisely, which eliminates wasted marketing spend.
- Generating Revenue
Eliminating duplication has benefits in more than one area. By establishing a single source for all customer intelligence, banks can improve accuracy of their data and centralize information management across organizations. Reducing the risk of duplication also streamlines middle- and back-office activities, freeing up staff to work on projects that add value and generate increased revenue.
Repurposing the Data
Capitalizing on risk, regulatory and compliance assets already collected to generate value for the business requires a five-step approach:
- Get buy-in from your leadership, based on the understanding that data represents a strategic asset and not simply an expense. This will circumvent concern about increased costs and avoid data ownership issues that contribute to corporate silos.
- Appoint a chief data officer at the business unit level, who can bridge the gap between compliance, IT and business operations and develop a vision for using data assets to create value.
- Develop an information management strategy around privacy and the sharing of data assets, which meets key business objectives of the institution.
- Set up a steering committee to develop the engagement model and funding procedures for information assets.
- Evaluate how data assets can support different projects to fulfill business objectives and develop a competitive advantage.
There are multiple ways existing data can be leveraged to generate additional value for a financial institution. We believe it’s time to stop viewing data as simply an operational cost, and start seeing it for the business asset it truly is.
JOHO OneSource™ enables companies to consolidate their compliance data in hours, instead of days, wading through multiple spreadsheets. Discover what we can do to help your institution today.