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LATEST POST | 7 Dec 2019
AUTHOR | Julien Redmond

How the Regulatory Landscape is Changing for Financial Services, and how Data Vault 2.0 Helps Overcome the Resulting Challenges.

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Financial service organisations in Australia are currently facing many challenges around regulatory reporting and compliance. The landscape and requirements are changing fast, and data volume is growing, resulting in a complex problem for many financial service providers.

Recently, I set down with my colleague James Hartwright to discuss these challenges in more detail and to talk about how Data Vault 2.0 helps organisations overcome them.

How are governance and regulatory reporting changing, and what are the challenges and roadblocks around that?

We definitely see reporting requirements for financial services evolve and change quite a bit at the moment. From having to report on wider dataset, to trying to aggregate data from multiple sources, increased regulations, and changes to the way reports need to be submitted, there is much change happening.

A lot of this regulatory reporting looks at some key financial entities like customers, products, outstanding balance and liquidity. In traditional data warehousing, we would get all this data from the sources and put it into a standard data model. With that standard data model, we need to use ETL code, we have to map the data and transform it, and we have to get it into a data model we can report on. We then have to be able to show to the regulators that we have taken the real data, stored it, integrated it, and then generated reports based on that. In other words, we have to be able to show that our reports represent the truth and the real facts that we know as an organisation.

Setting up this kind of data warehousing and management architecture usually requires significant development work with a lot of customization to apply individual business rules. As a result, being able to meet compliance and governance reporting requirements is often a financial burden for the business. However, it has to be done.

How does Data Vault 2.0 help overcome these challenges?

The Data Vault methodology addresses these data management challenges and offers organisations a pathway to confidently meet (and in many cases overachieve) regulatory reporting requirements in a more cost-effective way.

With Data Vault, we are taking the source data and connecting and mapping it to the key entities, called Hubs in Data Vault. This allows us to connect the data to the Hubs but keep the original source data as it is being supplied, which makes reporting extremely easy.

Furthermore, Data Vault follows standard patterns and needs very little custom coding (often none at all). That also means that you can follow standard testing processes and get your data to auditability level very quickly. It's easy to see how that results in significant cost savings.

In addition to saving cost, it also means that organisations can be confident they will meet regulatory reporting requirements. In fact, one of our banking clients, who has been setting up Data Vault, recently had their first compliance audit since implementing Data Vault. They told me afterwards that the regulator was extremely impressed and said that theirs had been the highest auditability store he had seen across all financial services.

Another key benefit of Data Vault lies in its integration capabilities, and the way business rules are applied. By connecting various source systems and integrating and standardising them through business rules, which are constructed and articulated on an attribute by attribute basis, it is very easy to show how data has been transformed, which is an essential aspect of being able to show the regulators what has been done.

Data Vault is an innovative data warehousing solution due to the way is maps data and connects it back to the source as well as the fact that business rules can easily be described, tested and improved. It's a powerful end-to-end data warehousing and management solution that can make regulatory reporting a lot easier.

Watch our webinar to learn more

Sign up for our on-demand webinar to listen to James and I as we discuss all of this and more about Enterprise Data Management and Data Vault in more details.

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