Leaders Identify Four Big Challenges: Data Lineage; Data Governance; Regulatory Changes; and Compliance Resources
NEW YORK, SINGAPORE, August 9, 2018 – AxiomSL, the leading global provider of regulatory-reporting, risk and data-management solutions, today announced the results of its annual survey of senior-level risk and regulatory executives in the Americas and Asia-Pacific (APAC) regions. The survey, conducted in June 2018, focused on financial services executives’ outlook on the regulatory landscape.
This year’s survey reveals a dwindling trust in data accuracy, with only 41% of Americas executives saying they trust the accuracy of their data, an 11-point fall-off from the 52% reported in the 2017 survey. Accordingly, Americas and APAC executives feel the primary concern is to improve data quality, data lineage and data aggregation.
“I believe the decline in trust in their data’s accuracy is reflected through the challenges experienced by executives and staff while trying to satisfy regulatory demand for more granular and analytical information,” said Alex Tsigutkin, CEO and Founder of AxiomSL. “Leaders today struggle to cope with the ‘3Vs’ of data challenges: velocity, volume and veracity. Regulators require information at ever-increasing frequencies, and organizations must grapple with huge volumes of diverse data in order to meet requirements and internal objectives. This is where veracity ― trust in the accuracy of the data ― becomes a crucial issue. Executives are very aware that the data they are capturing isn’t necessarily correct.”
Top Challenges for Risk and Regulatory Executives
When asked about the biggest regulatory challenges their organizations will face within the next three years, survey respondents in both regions called out data aggregation, lineage and reporting. Sixty-four percent of respondents in the Americas and 63% in APAC indicated their need to improve these capabilities. This challenge was ranked highest by Americas executives and second-highest by APAC executives.
The need to strengthen data governance was also strongly ranked by all respondents, with 52% of Americas and 41% of APAC executives identifying governance as one of their biggest challenges. In last year’s survey, just 30% of respondents in the Americas and 34% of respondents in APAC said the same.
Executives also strongly voiced their concern about having sufficient resources to deal with regulatory compliance. Forty-eight percent of Americas respondents ranked allocation of resources as one of their biggest challenges, up from 38% last year. Forty-seven percent of APAC respondents also consider this a top concern.
“In our survey, executives indicated their data management capabilities and data governance need improvement,” Tsigutkin said. “They also highlighted concerns about resourcing regulatory compliance adequately and adapting to regulatory changes. The challenges they identified, if not addressed effectively, will continue to impact the accuracy and nimbleness of their risk management and regulatory compliance capabilities, as well as limit the potential for organizations to gain insights from their own data. It makes sense that these leaders overwhelmingly recognize their main focus over the next three years is to work closely with their chief data officers to establish a data integrity and control infrastructure.”
Unsurprisingly, adapting to regulatory changes remains a top challenge for executives in both regions. In APAC, this was the highest-ranked concern overall, cited by 69%, up from 57% in 2017. In contrast, significantly fewer Americas executives included this among their top concerns with 43% citing it, down from 66% in 2017.
The survey also asked executives about their level of concern about their organization’s abilities to comply with upcoming regulations compared to last year. APAC respondents’ level of concern is clearly on the rise. In 2018, three-quarters (76%) said they’re more anxious, up from 69% in 2017. Americas respondents, on the other hand, are growing more confident, with only 14% of respondents saying they’re more concerned this year, down from 28% in 2017.
“Our survey results show that many executives in the Americas are more confident in their organizations’ ability to meet regulatory requirements and have shifted their focus to other priorities,” said Harry Chopra, Chief Client Officer at AxiomSL. “They’ve begun to realize the potential technology has to provide greater data governance and lineage. They understand that enhancing data integrity and controls enables firms to satisfy regulatory demand, gain analytic insight needed to develop new business ideas, and apply new technologies such as artificial intelligence and machine learning.”
For APAC executives, however, adapting to new regulations is still a critical challenge,” Tsigutkin added. “This makes perfect sense — significant initiatives from the Australian Prudential Regulation Authority (APRA) and Monetary Authority of Singapore (MAS) are now underway, which will heavily impact APAC financial firms over the next few years.”
Upcoming Areas of Technological Investment
Executives in both regions continue to plan to increase their investment in risk and regulatory technologies this year, an outcome that is in keeping with meeting the challenges identified by the respondents. The moderate uptick in the Americas — from 48% in 2017 to 52% in 2018 — is contrasted by the significant lift in the percentage of APAC respondents who plan to increase investment, from 44% to 61%.
Over the next three years, respondents in both regions overwhelmingly anticipate investing in data analytics (87% of Americas respondents; 74% of APAC respondents) and big data mining and analysis (59% of Americas respondents; 63% of APAC respondents). Respondents in the Americas plan to ramp up their investments in artificial intelligence and machine learning (54% in 2018 vs. 27% in 2017) and blockchain (21% in 2018 vs. 8% in 2017). APAC respondents plan to increase their investment in cloud computing (54% in 2018 vs. 24% in 2017).
“Innovation is the key driver that will enable financial institutions to conquer the challenges of the three ‘Vs,’ adapt quickly to regulatory and management changes, and continue moving forward,” Tsigutkin said. “Innovation is enabling faster execution of large datasets, greater data traceability, and flexible data structures. The next step for financial institutions is to create an innovation-friendly environment that maximizes the potential of data professionals’ expertise to enhance insights and respond to new opportunities.”
About the Survey
This survey was conducted at AxiomSL’s 9th Annual User Conferences, held in New York City, Singapore and Sydney, in June 2018. Copyright is held by AxiomSL. For the full survey results, contact Danielle Orsino at firstname.lastname@example.org.
AxiomSL is the leading global provider of regulatory-reporting, risk and data-management solutions for financial services firms, including banks, broker dealers, asset managers and insurance companies. Its unique enterprise data management (EDM) platform delivers data-lineage, risk aggregation, analytics, workflow automation, validation and traceability. For more information, visit www.axiomsl.com.