Adaptive for Regulatory Compliance

Regulatory compliance has become an increasingly pervasive feature of daily business in industry today as the various supervising agencies of Western governments introduce regulations that affect the full value chain.  The debate is no longer about whether or not regulations might get introduced, but rather when they will be and will we be prepared.

Transparency is the key to ensuring financial market stability, strengthened client protection and information disclosure.  Organizational agility is becoming necessary in order to react effectively to the continually changing parameters concerning risk and compliance reporting processes, in addition to being a feature of good commercial business practice. Both aspects need to be embraced.

Today the financial services industry commands the greatest attention as supervisory bodies introduce, resurrect or accelerate governance models including:

  • Basel
  • Solvency
  • Dodd Frank
  • European Market Infrastructure Regulation (EMIR)
  • Markets in Financial Instruments Directive (MiFID)
  • Know Your Customer (KYC)
  • Treating Customers Fairly (TCF)
  • Single Euro Payments Area (SEPA)
  • Foreign Account Tax Compliance Act (FATCA)
  • Volcker and Vickers reports.

Similarly, stronger governance is being prescribed in the energy, telecommunications, pharmaceutical and retail supply chain sectors (for example, customer rights and fair tariffs and supply chain quality assurance).

So why might compliance reporting be a problem for organizations? 

Owing to the disparate nature of many firms, often characterized as large, international, and formed through mergers and acquisitions, it is difficult to get a complete enterprise view of such operations and therefore gain the ability to manage market operational and reputational risk and compliance holistically.

The foundation of such risk and compliance reporting in today’s world is based on the information assets held in an organization’s various and mostly heterogeneous computer systems.  The data governance initiatives required for such reporting are based on principles that are very similar for most industries: that data should be accurate, appropriate, complete and timely.  The onus is placed on regulated organizations to demonstrate lineage, traceability, and quality of such reporting data from their underlying information assets.

This implies a need to establish and execute an end-to-end Data Governance Framework within the organization; to progressively improve data quality, demonstrate full traceability,and thereby satisfy regulatory compliance and reporting.  Over time, the ability to act proactively with information assets rather than reactively should enable an organization to anticipate and prepare for inevitable change in its business environment as well. This final stage, and arguably mature state, of compliance would therefore drive organizational agility by default – something implied in what is referred to as the Third Pillar in many of the regulatory frameworks.

However, organizations are finding that implementing this third pillar – incorporating risk management and compliance reporting into the fabric of normal business operations – is the hardest to achieve. This is because it is not just a one-time data gathering exercise – but rather is something that must be woven into all operational processes – which also generally means into its computer systems and information asset stores.  Tactical, onetime, after-the-fact reporting must become a strategic, holistic, persistent and real time mechanism to control information assets and ensure reporting compliance.

Adaptive supports key regulatory compliance efforts.

Regulatory Compliance Reporting

Adaptive firmly believes managing business metadata is both at the core of, and is the key to, achieving operational agility; and further that business and regulatory compliance reporting should derive from operational processes, and not as separate activities.  Putting it bluntly, if you don’t have a handle on where and how your data is stored, used, aggregated, compared and controlled – your reporting and management information may well not be appropriate, timely or complete.  We hold the same view about Big Data challenges: they require you to manage your Big Metadata. 

Metadata management may not be a new discipline, but it is one which has come of age in today’s increasingly complex and regulated world.

Adaptive today helps both firms and governments to execute data governance strategies by placing our metadata management repository at the heart of their operations.  Our own thought leaders and consulting partners can help you design a smart and structured approach that will enable you to leverage your existing solutions and technology investments which you may already have introduced as part of your regulatory efforts, and comfortably achieve compliance in your market. Furthermore, we believe that quick and decisive action in this area might also yield the chance to realize synergies from compliance activities which allow you to find new, or retain existing, business opportunities.