Top 5 Best Practices for Data Management
In today’s data-driven digital economy, traditional databases struggle to keep up with the increasing amount of streaming data. Adding to this stress are new compliance regulations, such as GDPR, that often complicate core processes across industries, including financial services. This article will discuss how financial service organizations can keep pace with growing data compliance requirements without compromising speed or impacting business activities.
Analyst firm IDC predicts that by 2025 the global ‘datasphere’ will swell to a staggering 163 zettabytes of data generated per year – that’s ten times the data generated in 2016. In today’s data-driven digital economy, traditional databases struggle to keep up with increasing amounts of data that stream in faster than ever. Compounding the challenges created by the dramatic increase in both the speed and scale of data is the broad impact of new data management and compliance regulations that often complicate core processes across every industry, including financial services.
Many financial services organizations comply with existing regulations, such as BASEL III, FFIEC, Sarbanes–Oxley and Markets in Financial Instruments Directive (MiFID II), along with the Fundamental Review of Trading Book (FRTB) requirements that went into effect in January. On deck is the General Data Protection Regulation (GDPR). Effective May 25, 2018 and issued by the European Union (EU), GDPR requires that any organization that handles data from an EU resident must be compliant. This includes providing increased transparency when reporting a security or confidentiality breach to regulators and those whose data is affected, all within specified timeframes.
The ever-increasing list of regulations is forcing financial services organizations to button up data management best practices. To better manage growing data volumes and effectively limit risks associated with compliance regulations, these organizations are breaking down data silos to provide better visibility and integration across the enterprise. However, as financial services organizations modernize their data infrastructures, they are often challenged to balance evolving compliance regulations with additional demands of their data, such as those around customer experience and operational productivity.
Some financial services organizations still store a majority of their data on legacy platforms, which can limit accessibility and visibility when it comes to meeting new regulatory requirements. Even financial services organizations that have fewer legacy systems are still likely to require database technologies that deliver enhanced interoperability to help provide a real-time view across their business.
Here are some data management best practices to help financial services organizations meet current and future compliance requirements:
- Read: Start by reading the new regulatory compliance acts and make a list of the new requirements and how they will impact your organization. There will likely be a host of new information and processes required.
- Take inventory: Then take inventory of your infrastructure and where your assets live. In the past, financial services organizations have often met regulations in a piecemeal fashion, adding new siloed applications with each new ruling.
- Identify the gaps: Now compare your existing data infrastructure to the new requirements and identify the gaps. The latest round of regulations is raising the stakes by requiring organizations to unify and analyze their data in real-time. If you determine that your capabilities are sub par, determine the solutions you need to be compliant.
- Be ready for an audit: As a financial services organization, you always need to be ready to provide regulators with information from anywhere in your data infrastructure. Make sure you’ve selected a reporting system that meets your needs.
- Check: Every six months, revisit the guidelines to ensure you are still compliant. Understanding and complying with these regulations reduces complication and risk.
Ensuring compliance can be a lot to manage, but if you stick with it and keep your data management policies in sync with new regulations, you will ensure that your financial services organization is always compliant.