The Finance Foundation
Reinventing capitalism for all
AUTHOR
Michel
Gabrysiak
President of the Finance Foundation

Data governance. Where to begin ?
March 12, 2015 , Michel Gabrysiak - Finance tech
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A robust approach to record keeping: information governance
Nowadays, the financial scene has changed. The well established financial institutions are exposed to new competitors (e.g. shadow banking) and to new products (e.g. mobile payments).
 
Furthermore, financial institutions face internal challenges to meet multiple compliance deadlines stipulated for example by the Basel agreement or the Data Protection Act. Another example, the Market in Financial Instruments Directive II (MiFID II) will be implemented by 2016/2017.
Nevertheless, clients remain the central point of the business line. A major issue is an accurate record keeping of their actions as foreseen under MiFID Directive.
 
Multiple layers of regulation
Article 51 of MiFID sets out a minimum list of requirements regarding record keeping: clients details, investment advice to retail clients, compliance reports, etc.
 
The time that data must be kept before being destroyed is in general five years. However, this retention period varies for different data types. For example, the retention period for a financial transaction is at least five years, for electronic communications related to securities orders; it is at least three years. Nevertheless, the retention periods for telephone records range from 3 months to 10 years.
 
Other European or international regulations require differing retention periods. For example, the Sarbanes-Oxley Act section 103 requires firms to maintain records for at least seven years for audit documentation.  According to the Basel agreement, firms must be retaining transaction data over a period of three to seven years.
 
As each regulation has distinct retention requirements for different type of documents, it leads to a head-spinning layer of complexity.
 
Extracting value
Record keeping involves time and effort. The key to maintaining records is a dynamic integrated and cost-efficient management tool.
Information governance enables companies to comply with the complex collection of regulations and to respond to a changing data retention requirement. Furthermore, information governance allows companies to manage data in an efficient way.
 
On top of the administrative point of view, data records represent value. Its use potentially makes commercial advantages in our global and competitive world.
In fact, information governance helps to achieve profitable business decisions by continuously managing data and by allocating time and budget towards value projects.

 

 

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