compliance packaged solutions as if they are plug and play software. This is why ... How do you analyse many reports con
Why is Regulatory Compliance so Expensive and Difficult? Over half of CIOs in financial services spend 30% or more of their IT change budget on regulatory compliance (Xantus Research Dec 2011). Given the plethora of solutions on the market, why do organizations find compliance such a struggle? Many CIOs in Retail and capital markets admit that they have a limited understanding on what compliance is all about. Is it any wonder? Who could possibly understand the entirety of Basel II and III, Solvency II, COREP, Bank of England Reporting, etc? There are just too many requirements, complex rules and data definitions; it really is complicated. Many of those responsible for delivering regulatory reporting solutions believe all you have to do is buy a packaged (turnkey) solution, tweak it a little, and job done. Indeed, many IT salesmen try to sell regulatory compliance packaged solutions as if they are plug and play software. This is why organizations have so many data fragmentation and data reconciliation problems. The more packaged solutions adopted, the worse the problem becomes! How do you simplify regulatory compliance in order to save costs? So what can a CIO do? The first step is accepting that packaged solutions are never going to be flexible and scalable enough to meet all your regulatory compliance needs. They are part of the problem, not the solution. The next step is a genuine focus on regulatory requirements, where the aim is to harmonize all requirements into a single ontology of terms, definitions, rules, values and value hierarchies. So what can a CIO do? The first step is accepting that packaged solutions are never going to be flexible and scalable enough to meet all your regulatory compliance needs. They are part of the problem, not the solution. The next step is a genuine focus on regulatory requirements, where the aim is to harmonize all requirements into a single ontology of terms, definitions, rules, values and value hierarchies. The CIO needs to accept that meeting all regulatory requirements as cheaply and effectively as possible requires brain power. The answer is not just buying more technology, it’s understanding and interpreting the data requirements.
Ideally, all regulatory reports could be placed in a hopper
and distilled to form a clear set of data requirements
represented in Ontology. How do you analyse many reports consistently and accurately? There are many reports, rules, data terms and values to be defined. How can you really achieve all that rationalization and standardization, with full data governance and data lineage, quickly and efficiently?
And
what about using all this to drive the technology solution? Indeed, how do you ensure full traceability from business requirements to source data elements? Complex report analysis requires tools and content to support the process. Analysis starts by capturing and matching report columns and row labels to a business glossary (part of the ontology). This process is followed by each rule in a report being deconstructed into detailed terms and definitions, which need to be represented in a business data model (another part of the ontology). On defining this data model (which could be an organization’s enterprise data model), the hard work has been done. All of the business regulatory knowledge can now be used to drive out the detailed design. So what? All this analysis and not a single report delivered! Designing and building the technology solution is really the easy part. Now that you know what the data requirements are, the business data model can be mapped to existing in-house systems (e.g. data warehouses/marts) to consider changes or extensions, or be used to build a new integrated reporting platform to meet all reporting needs.
In Summary If a CIO truly wishes to transform their organization’s regulatory compliance landscape, he or she must start with understanding the data requirements. This requires a combination of in-depth regulatory report understanding along with analysis/modeling skills; supported by innovative software and content. If done correctly, the rewards can be significant. Visit Informatica Marketplace for more information on the Allatus 360 - Report Analyser tool. Article by Stuart Dickson – Managing Director, Allatus Ltd. For more information, please contact Stuart Dickson at
[email protected] Also visit our block on Informatica Marketplace Allatus 360: Report Analyser
Worldwide Headquarters, 100 Cardinal Way, Redwood City, California 94063, USA phone: 650.385.5000 fax: 650.385.5500 toll-free in the US: 1.800.653.3871 www.informatica.com © 2012 Informatica Corporation. All rights reserved. Printed in the U.S.A. Informatica and the Informatica logo are trademarks or registered trademarks of Informatica Corporation in the United States and in jurisdictions throughout the world. All other company and product names may be tradenames or trademarks of their respective owners. First Published: September 2012
