The Importance of Business Process and Data Quality in Regulatory Reporting
Financial services are highly regulated and maintain a strong focus on compliance and risk management. Constantly monitoring data and also reporting it to the regulatory authority is their top priority. Considering that major financial organizations handle enormous amounts of data today, they require data accuracy and integrity at all times and have to adhere to all relevant security standards and regulatory guidelines.
What is business process / data quality in financial services?
Risk management and regulatory compliance both are strongly impacted by the quality of data. If the customer data, documents, requested bank products / services scrunity is incomplete or the forex values are not updated, the results can severely affect the credibility and bottomline.
Moreover, financial services are always time-sensitive where a single data error quickly multiplies in the downstream processes and is not easy to fix in time.
While data quality in financial services indicates if data is fit for use, its dimensions of completeness, timeliness, accuracy, and validity ensure compliance with the regulations. Data integrity, safeguarding the relationships of entities across the organization, is essential for managing risks.
Why are business process qualities important in finance?
Customer data can drift and lose integrity over time. Change of addresses or phone numbers may not get updated immediately. Added applications and new data sources may not get reconciled correctly.
These data quality issues in financial services directly impact customer experience, interactions, and transactions, resulting in higher costs and lost revenue.
Financial services also use the same data in reporting, analytics, and forecasting. Data quality issues lead to bad decisions and weak strategic planning, leading to higher expenses and lost customers.
Leveraging Business Process Intelligence for improving the efficiency and performance of financial services requires high-quality data and domain business rules understanding and implementation. Once deployed, the business rules and processes can be customised to extract and manage high-quality data to deliver trusted insights.
Finally, non-compliance due to poor process quality results in regulatory penalties that ultimately damages brand equity.
Compliance is one aspect where business processes, regulatory guidelines, data quality and data governance interact.
The highly scalable solution quickly helps generate reports and audit data for compliance with regulations.
The 2020 pandemic has swung the scales in favour of a more cloud-heavy strategy for banks and financial institutions. These changes would ultimately benefit consumers, who are increasingly dependent upon digital services versus in-branch interactions.
Most financial services organizations recognize the importance of business process intelligence and efficiency to provide desired data quality and introduce comprehensive initiatives to improve it.
With the right tools for continuous efficiency enhancements and data quality, up to 60% of manual efforts can be saved, and regulatory reporting and audits can be completed in a record time.
While data quality in financial services indicates if data is fit for use, its dimensions of completeness, timeliness, accuracy, and validity ensure compliance with the regulations. Data integrity, safeguarding the relationships of entities across the organization, is essential for managing risks.
Accuracy of this data is critical for data-driven business decisions, and identifying anomaly values earlier in the data ingestion process significantly reduces downstream complexity.
Another factor that affects the quality of data generated by reporting, exchanges, and source systems is hidden patterns. Finding improbable patterns before they get used in data-driven decisions can considerably save the remediation efforts.
Financial services work with sensitive data, and the value of this data makes them vulnerable to cyber threats. Technology-enabled internet and mobile banking expose online financial transactions to possible security breaches.
As a result, financial organizations are increasingly turning to automation for detecting and defending against cyber-attacks.
Most financial services organizations recognize the importance of data quality and introduce comprehensive initiatives to improve it. With the right tools for continuous data quality, up to 60% of manual efforts can be saved, and regulatory audits can be completed in a record time of just four weeks.