BearingPoint, Inc., one of the world's largest business consulting and systems integration firms, issued a new white paper, "The Return on Investment Behind a Converged Approach to Data," which details the way financial institutions can start using current initiatives, such as Basel II, customer relationship management (CRM), or Sarbanes-Oxley, to build a platform for converged data standards.
BearingPoint also recently announced the findings of a survey of leading financial institutions, conducted by the Economist Intelligence Unit, that together with the conclusions of the white paper, found excessive spending and duplication of efforts around risk management and financial transparency, due to the absence of data standards.
"Companies facing the challenge of trying to balance multiple regulatory timelines and requirements with the demand for growth, realize they must look at their data issues and find a way to converge elements related to risk, finance and customers, along with related governance, process and technical designs," said Christopher Hamilton, a senior vice president with BearingPoint and leader of the Global Risk Management group. "New data requirements now include previously not captured attributes, such as transaction and collateral detail, identity credentialing and entitlements, security protection, encryption, integrity validation and digital signatures. Documenting and demonstrating compliance can incur additional costs into the millions. In particular, access and retrieval costs have become onerous."
The results of the BearingPoint survey released on April 6, indicated other possible problems for companies seeking to halt excessive spending on risk and compliance caused by the lack of data convergence, including:
The participants agreed that the two biggest obstacles to effective integration are cost and a lack of standardized data models.
- Only 18 percent say their risk solutions link up with their CRM systems.
- Just 37 percent say their risk solutions link with customer data repositories.
- Less than 50 percent say their risk solutions link up with enterprise-wide financial general ledger and management information systems.
More than 190 executives responded to the survey from across the globe, representing the following regions: Western Europe 26 percent, Eastern Europe 6 percent, Asia-Pacific 22 percent, North America 25 percent and Latin America 9 percent with 11 percent from the Middle East and Africa.
To obtain a copy of the survey, please go to www.bearingpoint.com/riskstudy.
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