REGULATORY WATCH

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DID ANYONE SAY DATA QUALITY?

DID ANYONE SAY DATA QUALITY?

The quality of the data is always a key issue in the implementation initiatives of new regulations in the financial services sector! The financial crisis of 2008 has undermined the confidence of investors, putting front and centre questions concerning the transparency of financial information.

What is good data quality?

There is no unanimous definition of data quality, but I really like this definition by Informatica. According to them, “Data quality refers to the overall utility of a dataset(s) as a function of its ability to be easily processed and analyzed for other uses, usually by a database, data warehouse, or data analytics system. Quality data is useful data. To be of high quality, data must be consistent and unambiguous.”
(Source:https://www.informatica.com/services-and-training/glossary-of-terms/data-quality-definition.html#fbid=chN4CZHRHdu)

Since then, regulators have advocated for the provision of data quality but without taking into account the actual state of this data in the real world: usually with a poor standard of quality compared to what is required. Most of the time, the gap between reality and the stipulations of the law are such that they require the implementation of:

– data cleansing if the situation is dire,

– employee awareness of issues concerning data entry into open source software applications…,

– …ensuring the implementation of data governance, if it is not already a long-term initiative…

If organizations want to come to terms with upcoming regulatory issues, they will have to better anticipate the work to improve the quality of their data and to establish solid data governance through their Business Intelligence (BI) program, without forgetting to incorporate the regulatory data, in addition to the traditional marketing data. The upcoming regulations will require firms in the financial services sector to trace their chain of information in order to identify the relevant data in regulatory risk management and compliance.

Finally, I would say that it is difficult to manage regulatory compliance without being able to trust the data. Because banks and insurance companies are obligated to enforce laws, these companies have the golden opportunity:
– to deepen the knowledge of their client,

– to improve their profitability, and

– to enhance their decision-making.

It is also important to note that regulations such as Basel are now also imposing quality standards called principles of “Principles for effective risk data aggregation and risk reporting” (BCBS 239) (http://www.bis.org/publ/bcbs239.pdf).

Feel free to contact me and share your experience on data quality with me as you proceed with the implementation of your regulatory projects!

CANADIAN BANKS MONEY-LAUNDERING CONTROLS FAIL…

CANADIAN BANKS MONEY-LAUNDERING CONTROLS FAIL…

An article in the newspaper “The Wall Street Journal” from August 6, 2015, raises concerns about the inadequacies of certain Canadian banks in regard to the fight against money laundering: the federal regulator, the Office of the Superintendent of Financial Institutions (OSFI) found 72 cases of regulatory non-compliance between 2009 and 2014.

The article explains that the banks concerned were not named in the documents obtained by the Wall Street Journal nor whether the banks had faced financial penalties. The article also mentions that Canada has been facing growing international pressure to intensify its efforts to combat money laundering: In 2013, the U.S. State Department named Canada as a country of “primary concern” when it comes to money laundering. The U.S. State Department emphasizes that currency transactions at financial institutions involving large sums of money from international drug trafficking as being “problematic”. According to the Wall Street Journal, concerns also remain about Canadian banks within the country. The newspaper referred to a recent report from Canada’s Department of Finance that rated the vulnerability of deposit-taking institutions as “high to very high”.

The article specifically talks about the case of the Royal Bank of Canada (RBC) that moved to close down its wealth-management operations in Latin America and the Caribbean last year after having suffered a string of investigations in different countries, and in 2013, a warning from a U.S. regulator advised that RBC’s anti-money-laundering controls were unsatisfactory. RBC defends itself by explaining that it is doing everything possible to ensure the integrity of its corporation by respecting the legal and regulatory framework of every country in which it operates. At the same time, Ottawa announced its intention to strengthen Canada’s anti-money-laundering regime in order to remain at the forefront of the global fight against money laundering and terrorist financing, according to the Wall Street Journal.

We can see that a long road lies ahead in the fight against money laundering and that it will remain the central focus of financial institutions for many years to come. 

To find the full article from the Wall Street Journal (available only to subscribers): http://www.wsj.com/articles/canadian-banks-money-laundering-controls-failed-1438904411

WELCOME TO THIS BLOG!

WELCOME TO THIS BLOG!

This blog serves as a regulatory watch. What is a regulatory watch?

My definition of a regulatory watch (also called regulatory monitoring) is a monitoring device for the regulatory provisions that may affect the activity of a company. The watch is aimed at identifying the regulations as soon as possible in order to anticipate and even influence their impact. Regulatory watch may allow companies to discover new opportunities!

More specifically, this blog serves as a regulatory watch on new laws and regulations that have an impact on the financial services sector, particularly banks and insurance companies, both in Canada and internationally.

Why is there a regulatory watch dedicated to the financial services sector?

As an expert consultant and an avid proponent of the delivery of projects for regulatory compliance and risk management, I am an active and productive participant in the implementation of these new laws and regulations that are changing the landscape of financial services. Through this blog, I wish:

• to share my expertise and experience in the delivery of projects for regulatory compliance and risk management,

• to encourage dialogue and share my experience with those who are affected by these regulatory changes or who participate (or would like to participate) in regulatory compliance and risk management projects,

• to be a sounding board for international news covering this topic.

Whether it be to manage the risk of tax evasion, enforce legislation on the proceeds of crime (money laundering) and the financing of terrorist activities…or improve your data quality as a precondition to the implementation of a new regulation, do not hesitate to contact me for your future regulatory proposals!

Anyone who has business dealings with a bank or an insurance company might also be interested in reading this blog, in order to better understand the transformations that have been taking place in this fast-evolving sector since the financial crisis of 2008.

I look forward to reading YOUR comments, remarks and suggestions!