Data Governance and BCBS 239

October 9, 2015 – By Robert Lee, Senior Vice President, Subject Matter Expert Regulatory Reporting

The drive for improving data governance arises from the lessons learned by regulators from the global financial crisis that began in 2007. Regulators and the banks themselves discovered their information technology and data architectures lacked the ability to measure and manage risk. This realization led to principles established by the Basel committee to improve banks’ risk data aggregation capabilities and ability to report on risk, commonly referred to as BCBS 239 (Principles for effective risk data aggregation and risk reporting) in January 2013.

AxiomSL | Inside View - Data Governance and BCBS239As banks, advisory firms, and the technology industry assess how to implement BCBS 239, many of the common approaches being proposed utilize concepts of a standardized data model and taxonomy to create a “golden source” for financial and risk reporting. As wonderful as this sounds on paper, the reality of trying to implement such an approach is extraordinarily challenging due to issues with common technology approaches to resolve data quality, accessibility, lineage, and ongoing change management. The odyssey to attain a “golden source” has led to many ongoing, expensive failures to deliver a fully integrated solution over the recent years due to the difficulties created by these issues. Many attempts for a “golden source” has resulted in only partial automated solutions while still requiring significant manual intervention to address the issues described above.

This has led to the evolution of alternative thought leadership that no longer views a “golden source” as the best solution. AxiomSL is among those firms leading the alternative thought process for tackling the challenges of data governance and BCBS 239. AxiomSL approaches data governance and BCBS 239 with a unique approach that is agnostic to business/product type. We utilize the platform’s ability to consolidate modern and legacy technologies by enriching data taxonomies and metadata across the organizations’ entire technology infrastructure. The enriched data serves as the foundation for aggregation, reporting, and analytics while retaining the ability to drilldown and view data at the original source. Maintenance of the enriched data is also flexible and transparent since AxiomSL retains the identity of each source thus allowing for ease of transition to support ongoing infrastructure initiatives.

AxiomSL’s platform is able to accomplish this with a robust, object based approach to managing data allowing for flexible data sourcing, modeling, and business rules capabilities to integrate and consolidate disparate data taxonomies and metadata. Its ability to aggregate data based on these business rules and deliver reporting with full workflow management, versioning, and drilldown capabilities addresses the key BCBS 239 principles.

In addition, AxiomSL is also partnering with other leading technology firms such as IBM to incorporate their data lineage tools which allow for monitoring of data movement throughout the global information technology infrastructure. IBM InfoSphere Information Server is a data integration software platform that helps organizations derive value and understanding from complex, heterogeneous information in their organization. The platform is composed of various components to understand, cleanse, transform, and deliver information. IBM Infosphere together with the AxiomSL platform provides banks with a powerful, flexible solution for fully implementing data governance and BCBS 239 compliance.

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