Regulatory reporting and compliance

 

Financial institutions have a common challenge – how to become and maintain compliance with government and industry regulations? eccenca believes that data access, data management and data interpretation are at the heart of this challenge and thus must be met independently of any one single regulation. In fact a sound understanding of data on an integrative level is the core basis for timely decision making, product pricing, risk management and not only for regulatory reporting. This in fact seems to increasingly also be the sentiment of the regulator itself. Take for instance BCBS 239 which is expressly stating: "Banks do not necessarily need to have one data model; rather, there should be robust automated reconciliation procedures where multiple models are in use" eccenca is part of a global organization called the Enterprise Data Management Council (EDMC). This organization is a platform for members of the financial services industry that understand the value of collaboration on standards. Two of these standards are at the very basis of eccenca solutions to the financial services industry:

 

  • DCAM (Data Managemenet Capability Assessment Model)  was created on a collaborative basis by the members of the EDM Council as a standard set of evaluation criteria for measuring data management capability.  DCAM documents 37 capabilities and 115 sub-capabilities associated with the development of a sustainable data management program.

  • FIBO (Financial Industry Business Ontology)  The Financial Industry Business Ontology (FIBO) is a business conceptual ontology developed by the members of the EDM Council.  FIBO provides a description of the structure and contractual obligations of financial instruments, legal entities and financial processes.  FIBO is used for harmonization of data across repositories as a common language (i.e. Rosetta stone) for risk analysis and business process automation.  FIBO is expressed in the triplestore language of the Web (RDF/OWL) for machine readable inference processing and UML for people readable analysis

 

Financial services organizations (FSO) are increasingly being challenged by regulators to establish organization wide governance and control mechanisms to manage risk more effectively. While other regulations are calling for the provision of specific KPIs or data sets to underscore compliance, regulations like for instance BCBS 239 are expressly asking financial services organizations to not only patch up reports, but effectively come to grips with their IT and data infrastructures. eccenca Corporate Memory effectively addresses the need for an intraday companywide view on data, be it for regulatory reporting, risk management or simulations as done for product pricing and stress testing. Though other than existing approaches that require the entire organization to consolidate to a common data model, eccenca CMEM leverages industry standards (FIBO) and best practices (DCAM) to establish and maintain a virtual common understanding and integration of data. Thus leaving existing systems untouched! In doing so, eccenca CMEM provides an unparalleled degree of understanding/meaning, governance and control over financial services organizations data at a cost that is significantly lower than any other approach.

DCAM Assement

 

eccenca is offering the full range of DCAM enablement services including workshops, training, assessment-tooling, benchmarking and data strategy development support. eccenca attained the status of Authorized DCAM implementation partner of the EDM Council.

 

Learn more about DCAM:

 

FIBO Lifting

 

eccenca with its CorporateMemory platform offers a complete range of tools to leverage FIBO as the lingua franca for building a dependable basis for data reconciliation as stated by BCBS 239 and other regulations. Contact us today for a guided tour or access to a sandbox on our SaaS platform!

 

BCBS 239 Compliance:

 

BCBS 239 asks for an overarching semantic understanding and governance of data. In its core BCBS 239 compliance hinges upon three pillars:

 

  • Governance and Infrastructure
  • Risk Data Aggregation
  • Risk Data Reporting
  •  

eccenca Corpate Memory is designed to provide a solution to all three pillars by leveraging and complementing DCAM and FIBO. Specifically in terms of governance and infrastructure BCBS 239 asks to make data quality a C-level responsibility. It further requires financial organizations to effectively perform data aggregation across organizational borders and to adopt and implement agile principles, especially to cut response times in crisis. The eccenca solution approach starts by defining data governance based on DCAM best practices and industry benchmarks. This allows to quickly spot gaps and to prioritize them. Next is the alignment of organizational data to a common framework of meaning, which effectively means to map your operational data structure to FIBO. After identifying the most urgent areas for action and the establishment of a data virtualization layer we start to create flexible custom views, in order to drive your regulatory processes, feed your KPIs, etc. - everything without hard coded Data Ware Houses.

 

In the area of risk data aggregation BCBS 239 sets requirements in terms of correctness and completeness of data, the degree of data process automation, timeliness of data and reports and asks for increased flexibility and scalability to effectively respond to crises. Corporate Memory answers these needs by establishing data governance and data lineage based on DCAM practices and Corporate Memory drill back capabilities. Corporate Memory furthermore allows for the definition of data workflows, flexible multidimensional and poly-structured data model as well as hadoop based horizontal scale out - features that directly address the regulations requirements. In addition Corporate Memory can feed quality dashboard solutions like MicroStrategy.

 

The pillar of risk data reporting characterizes requirements like a timely creation of validated risk reports, the integration of all material risk fields, comprehensibility, transparency on scope as well as on precision and weaknesses. eccenca Corporate Memory addresses these needs by offering market leading reporting tools as a service. Furthermore Corporate Memory provides quality KPIs as metadata on top of your datasets.

 

 

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