Regulatory Compliance in Finance and BI
More financial organizations are looking to BI to address their regulatory compliance needs. After the current recessionary trends, many organizations realize the immediate need for a BI infrastructure in compliance area to measure the overall compliance effectiveness of their organizations. In this blog, we will try to analyze if such a requirement can be handled in BI and what would be the way to handle this efficiently.
Expecting any financial organization to have readily available data for regulatory compliance reporting is unwise. This data exists in the transactional systems of an organization. However, the data that we would be looking for would not be available at one place. So, before implementing any BI solution we would need to know what to measure.
In the compliance world, we would be measuring deviations. Any non-conformance with laws or rules observed in daily transactions need to be captured and maintained, which is good enough for reporting and finding trends over a period of time. Most of the organizations would have a crude way doing this currently, using excel sheets or ad-hoc queries.
Will BI work in such a scenario? Yes, BI will not only work but also be really useful for all management reporting which involves providing a high level idea of the number of such non-conformances being encountered.
As mentioned earlier, once there is enough data which is reportable, it can be used for trending as well. Daily or weekly data can be used to find the exact number of deviations that happened. Further analysis would be intended to check if the violations were real or not. Accounts which were a part of the violations could be noted and based on the analysis, actions initiated.
Monthly or yearly trends will help the organization analyze its effectiveness and understand if the checks it has put in place to prevent frauds or violations are working.
Though the immediate advantages of this setup are immense, it is the long term benefits that would interest any financial organization.
Daily work of compliance officers would be reduced greatly from trying to collate the data to suggesting and implementing better checks to avoid deviations. The organizations on the whole would be able to provide better quality of service to their customers. Constant improvement in efficiency of the transactional systems is another major advantage.
BI can also be effectively used by providing role based access to the compliance system where the head of compliance would have a global view of all the units under him. Such features can be easily implemented using BI. We will dwell on the implementation part later.
BI will not be a one stop solution for all regulatory compliance issues; it will definitely be the starting point. By leveraging the best practices and standard features in a BI tool, we will improve the overall efficiency and preparedness of any financial organization.
{ The content of this blog has been provided by Anand NPN , Who is a consultant with the Oracle Business Intelligence Practice at Infosys. His areas of interest include Packaged BI Applications.}


