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“Single Version of the Truth” Required by BCBS 239 Can Provide Value Beyond Obligations

Dec 10, 2015

Financial organizations manage a lot of data, which is often scattered throughout the organization in a variety of silos and formats. The unstructured nature of data ownership, location, and format presents considerable impediments to the application of risk modeling analytics. Simply put, If the firm’s data is not effectively collected and managed, it is difficult to run analytics and therefore extremely labor intensive to discover and report on the firm’s exposure to risk.

The Basel Committee on Banking Supervision’s (BCBS) 239 standard aims to change this, pushing banks to proactively review and redesign their processes to effectively guide risk data aggregation and reporting for systematically important financial institutions (SIBs). Global systematically important banks (G-SIBs) must comply with this regulation by January 1, 2016. D-SIBs (domestic systematically important banks) are strongly encouraged to comply within three years of their designation. The BCBS 239 standard encourages a fundamental review of a firm’s systems, data architecture, and IT infrastructure, placing strong emphasis on a single master database to allow for a “single version of the truth.”

While meeting these criteria can present challenges for IT, which is often challenged to create, enrich, and manage a master database on an ongoing basis while working around legacy systems, BCBS installs a framework that will allow institutions to better understand their internal content, and as a result allow them to efficiently and accurately report on it.

FactSet’s Enterprise Data Management (EDM) solutions add value to BCBS requirements by providing the structure users need to organize data and information, distribute it across the firm, and manage its evolution.

In addition to facilitating compliance with BCBS 239, Factset’s EDM also provides tools and reference data that can help clients get more out of the data restructuring the standard requires.  

  • Use linkages and hierarchies between entities, securities, people, and funds to determine a firm’s true exposure. Add additional content sets to your process through FactSet’s hub and spoke model.
  • Access thousands of FactSet-sourced and third-party databases to provide a robust market data solution that combines global coverage, deep history, and unparalleled transparency.
  • Enrich your content with FactSet’s unique datasets, from company financials and estimates to geographic revenue, supply chain, ownership, people and sanctions.

Working in tandem with EDM, FactSet Concordance Services leverages an extensive entity database along with FactSet’s content collection expertise to provide one-to-one relationships between locally managed identifiers and a FactSet identifier, empowering standardized data requirements of BCBS 239 even further. FactSet identifiers are mapped to industry-standard identifiers as well as to a comprehensive set of reference data and unique content managed by FactSet EDM.

By leveraging Concordance Services and FactSet EDM, users can meet BCBS 239 standards faster and get more out the “single version of the truth” it requires.

For more on BCBS 239, visit www.factset.com/smartdata

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