While one might think that a term like Data Management is more apt for technologically agile sectors like IT, the truth is that these practices can bring a huge benefit to the financial industry as well. And the benefits arising out of this are not generic in nature, but rather deal with the core challenge today’s financial industry is facing – regulatory compliance.
With the world economy opening up and businesses covering many different geographies and economies, the most pressing problem is that of ensuring a common reporting format. Accounting and auditing are done differently in different places, which has given rise to the present-day push for implementing IRFS, a common financial reporting standard.
But that said, the first step towards regulatory compliance is the need to get control over the various scattered sources of data and integrate them into a centralized system. Companies that use different data centers and workflows for payroll, inventory, sales, procurement, etc., can testify to the daunting difficulties that can arise in implementing coherence and accuracy. If there are multiple data centers with different levels of control, redundancy becomes more prevalent, there are gaps in reporting, and the overall data quality falls.
In a such a scenario, it is indeed futile to talk about regulatory compliance. That is why banks and financial corporations who want to take compliance seriously must first assess their processes and implement a master data strategy. This will also make it easy to adopt and benefit from the cutting-edge technology practices like big data, business intelligence, etc.