Global Regulation Seen as Primary Concern for Data Firms

The ability to understand regulation and its impacts on client information will be the key factor for data management firms to invest in technology, according to an executive at the Depository Trust & Clearing Corporation (DTCC).
By Joe Parsons(2147488729)
The ability to understand regulation and its impacts on client information will be the key factor for data management firms to invest in technology, according to an executive at the Depository Trust & Clearing Corporation (DTCC).

Increased regulatory requirements and related penalties, along with concerns of fragmented data management are among the key concerns for financial data firms, according to a joint study from the DTCC and research firm Aite Group.

The study found 80% of respondents believe regulatory changes to OTC derivatives and the Foreign Account Tax Compliance Act (FATCA) pose the greatest threat to operational challenges for entity data management processes.

Following this, the ability to gauge the evolving financial market and make the necessary investments in technology will determine if firms will survive.

The study also found 69% of firms indicated that data quality and the need for defined governance processes for entity data management were of greatest importance when meeting investor transparency and regulatory reporting obligations.

“Just as important are the governance procedures around data. As firms start to identify their data requirements, they need to also establish the governance which will oversee the policies and procedures needed to ensure on-going data quality, something many of the regulations are requiring,” says Ron Jordan, chief data officer, DTCC.

Furthermore, Jordan also argues that regulatory change has created challenges for both buy-and sell-side firms.

“Siloed and legacy data management systems have created challenges around data quality and governance which could prevent firms from meeting regulatory requirements and lead to penalties, loss of business and reputational damage.

“For buy-side firms providing the same data to many sell side firms, the question is whether they can trust a single, mutualized facility that can store and distribute their information on demand. For the sell-side, the question is whether they can trust a central repository of client information as the data and document source for the sell-side to perform their required client due diligence.”

«