Market Overview

AxiomSL Survey: Risk and Regulatory Executives Report Dwindling Trust in Accuracy of Organizations' Data

Share:

Leaders Identify Four Big Challenges: Data Lineage; Data Governance;
Regulatory Changes; and Compliance Resources

AxiomSL,
the leading global provider of regulatory-reporting, risk and
data-management solutions, today announced the results of its annual
survey of senior-level risk and regulatory executives in the Americas
and Asia-Pacific (APAC) regions. The survey, conducted in June 2018,
focused on financial services executives' outlook on the regulatory
landscape.

This year's survey reveals a dwindling trust in data accuracy, with only
41% of Americas executives saying they trust the accuracy of their data,
an 11-point fall-off from the 52% reported in the 2017 survey.
Accordingly, Americas and APAC executives feel the primary concern is to
improve data quality, data lineage and data aggregation.

"I believe the decline in trust in their data's accuracy is reflected
through the challenges experienced by executives and staff while trying
to satisfy regulatory demand for more granular and analytical
information," said Alex Tsigutkin, CEO and Founder of AxiomSL. "Leaders
today struggle to cope with the ‘3Vs' of data challenges: velocity,
volume and veracity. Regulators require information at ever-increasing
frequencies, and organizations must grapple with huge volumes of diverse
data in order to meet requirements and internal objectives. This is
where veracity ― trust in the accuracy of the data ― becomes a crucial
issue. Executives are very aware that the data they are capturing isn't
necessarily correct."

Top Challenges for Risk and Regulatory Executives

When asked about the biggest regulatory challenges their organizations
will face within the next three years, survey respondents in both
regions called out data aggregation, lineage and reporting. Sixty-four
percent of respondents in the Americas and 63% in APAC indicated their
need to improve these capabilities. This challenge was ranked highest by
Americas executives and second-highest by APAC executives.

The need to strengthen data governance was also strongly ranked by all
respondents, with 52% of Americas and 41% of APAC executives identifying
governance as one of their biggest challenges. In last year's survey,
just 30% of respondents in the Americas and 34% of respondents in APAC
said the same.

Executives also strongly voiced their concern about having sufficient
resources to deal with regulatory compliance. Forty-eight percent of
Americas respondents ranked allocation of resources as one of their
biggest challenges, up from 38% last year. Forty-seven percent of APAC
respondents also consider this a top concern.

"In our survey, executives indicated their data management capabilities
and data governance need improvement," Tsigutkin said. "They also
highlighted concerns about resourcing regulatory compliance adequately
and adapting to regulatory changes. The challenges they identified, if
not addressed effectively, will continue to impact the accuracy and
nimbleness of their risk management and regulatory compliance
capabilities, as well as limit the potential for organizations to gain
insights from their own data. It makes sense that these leaders
overwhelmingly recognize their main focus over the next three years is
to work closely with their chief data officers to establish a data
integrity and control infrastructure."

Unsurprisingly, adapting to regulatory changes remains a top challenge
for executives in both regions. In APAC, this was the highest-ranked
concern overall, cited by 69%, up from 57% in 2017. In contrast,
significantly fewer Americas executives included this among their top
concerns with 43% citing it, down from 66% in 2017.

The survey also asked executives about their level of concern about
their organization's abilities to comply with upcoming regulations
compared to last year. APAC respondents' level of concern is clearly on
the rise. In 2018, three-quarters (76%) said they're more anxious, up
from 69% in 2017. Americas respondents, on the other hand, are growing
more confident, with only 14% of respondents saying they're more
concerned this year, down from 28% in 2017.

"Our survey results show that many executives in the Americas are more
confident in their organizations' ability to meet regulatory
requirements and have shifted their focus to other priorities," said
Harry Chopra, Chief Client Officer at AxiomSL. "They've begun to realize
the potential technology has to provide greater data governance and
lineage. They understand that enhancing data integrity and controls
enables firms to satisfy regulatory demand, gain analytic insight needed
to develop new business ideas, and apply new technologies such as
artificial intelligence and machine learning."

For APAC executives, however, adapting to new regulations is still a
critical challenge," Tsigutkin added. "This makes perfect sense —
significant initiatives from the Australian Prudential Regulation
Authority (APRA) and Monetary Authority of Singapore (MAS) are now
underway, which will heavily impact APAC financial firms over the next
few years."

Upcoming Areas of Technological Investment

Executives in both regions continue to plan to increase their investment
in risk and regulatory technologies this year, an outcome that is in
keeping with meeting the challenges identified by the respondents. The
moderate uptick in the Americas — from 48% in 2017 to 52% in 2018 — is
contrasted by the significant lift in the percentage of APAC respondents
who plan to increase investment, from 44% to 61%.

Over the next three years, respondents in both regions overwhelmingly
anticipate investing in data analytics (87% of Americas respondents; 74%
of APAC respondents) and big data mining and analysis (59% of Americas
respondents; 63% of APAC respondents). Respondents in the Americas plan
to ramp up their investments in artificial intelligence and machine
learning (54% in 2018 vs. 27% in 2017) and blockchain (21% in 2018 vs.
8% in 2017). APAC respondents plan to increase their investment in cloud
computing (54% in 2018 vs. 24% in 2017).

"Innovation is the key driver that will enable financial institutions to
conquer the challenges of the three ‘Vs,' adapt quickly to regulatory
and management changes, and continue moving forward," Tsigutkin said.
"Innovation is enabling faster execution of large datasets, greater data
traceability, and flexible data structures. The next step for financial
institutions is to create an innovation-friendly environment that
maximizes the potential of data professionals' expertise to enhance
insights and respond to new opportunities."

About the Survey

This survey was conducted at AxiomSL's 9th Annual User Conferences, held
in New York City, Singapore and Sydney, in June 2018. Copyright is held
by AxiomSL. For the full survey results, contact Danielle Orsino at danielle@w.group.

About AxiomSL

AxiomSL is the leading global provider of regulatory-reporting, risk and
data-management solutions for financial services firms, including banks,
broker dealers, asset managers and insurance companies. Its unique
enterprise data management (EDM) platform delivers data-lineage, risk
aggregation, analytics, workflow automation, validation and
traceability. For more information, visit www.axiomsl.com.

View Comments and Join the Discussion!