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Data Management Review

Data Management Review (formerly Reference Data Review) is your single destination for knowledge and resources covering data management approaches, trends and challenges as well as all the regulations impacting financial data management for the enterprise.

BNP Paribas has selected Fenergo’s client lifecycle management (CLM) solution as part of a global transformation project that aims to deliver a single view of clients across all jurisdictions and enable the bank to comply efficiently with local and global regulatory rules, and deliver optimum customer experience.

Bernard Gavgani, global head of CIB IT and operations at BNP Paribas says the bank chose Fenergo on the basis of its out-of-the-box CLM functionality and v8 technology that is a good fit with the bank’s modernised technology landscape.

The deal with BNP Paribas marks the sixth European client to be signed by Fenergo in the past six months. Fenergo CEO, Marc Murphy, says: “There are two key drivers behind Fenergo’s success to date – digital transformation and heightened regulatory compliance and scrutiny. Banks that would have traditionally favoured in-house built solutions are turning to Fenergo to help them comply with regulatory rules, while delivering a better customer experience.”

Fenergo introduced v8 in June 2017 as an easy-to-use and intuitive platform. The solution is built on React, the technology that underpins firms such as Netflix, Facebook and Instagram, and provides an improved user experience with more efficient orchestration, enhanced navigation and greater visibility across client cases. Advanced technology architecture delivers faster page load times and responsive design, enabling cross-browser and multi-device support, improved search engine outcomes, increased scalability and greater data integration capabilities.

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Author: ateamgroup
Posted: November 22, 2017, 11:19 am

Artificial Intelligence (AI) is emerging as a key technology for financial services firms, with applications ranging from algorithmic stock trading and credit card fraud detection to sanctions monitoring and trade settlement. The benefits of AI technologies can include automation, reduced manual intervention, improved efficiency and cost saving, but there are caveats and concerns for legal, risk and compliance officers. From a data management perspective, challenges include integration, data validation and ongoing maintenance.

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Tuesday, December 5, 2017 - 15:00
Author: ateamgroup
Posted: November 21, 2017, 5:18 pm

Asset Control is up for sale, with owner Marlin Equity Partners looking to sell to another private equity or venture capital company, according to individuals familiar with the proposed transaction. The asking price? An astonishing eight times EBITDA, or about £100 million, according to these individuals. Marlin is believed to have paid less than £20 million to acquire Asset Control in 2013.

To make Asset Control more attractive to potential buyers, headcount has been halved from the almost 200 on payroll at the time Marlin took over from previous owners Fidelity Ventures, and surplus-to-requirements European offices have been closed to cut costs. This reduction in overhead has been accompanied by a major push to migrate the firm’s offerings to cloud and hosted service models, and the addition of open source solutions including Apache Cassandra and Cloudera.

Asset Control declines to comment on the prospect of a sale and Marlin does not return phone calls.

The launch of the Asset Control sales prospectus comes just over 18 months after the installation of former Interactive Data Corp President Mark Hepsworth as CEO, and four years after the company’s acquisition by Marlin Equity Partners from Fidelity Ventures in 2013.

The tenure of Hepsworth, the third CEO since Marlin took over the company, has been characterised by relative calm following a fairly tumultuous period in Asset Control’s history, which also saw the late pull-out of Markit from acquisition talks prior to Marlin’s arrival.

Hepsworth brought a new broom to Asset Control, hiring senior executives to the management team including Gary Appleby, head of international sales, and Simon Rayfield, head of client services. On joining the company, he signalled a shift away from the company’s traditional focus on large EDM solutions and a move towards provision of more focused use case products including Fundamental Review of the Trading Book (FRTB) and Markets in Financial Instruments Directive II (MiFID II) solutions, and an independent price verification service. Standardisation of products to help clients avoid customisation was also on Hepsworth’s agenda, along with an increase in staff numbers.

Asset Control has this year made two significant additions to its portfolio: data loaders that will deliver full sets of MiFID II reference data fields to financial institutions; and a recently released cloud-based, NoSQL market and reference data platform powered by DataStax Enterprise and integrated with AC Plus to address issues around data volume, speed and access.

It remains to be seen whether this will be enough to lure potential buyers to part with £100 million. We’ll keep you posted.

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Author: ateamgroup
Posted: November 20, 2017, 4:20 pm

The winners of A-Team Group’s inaugural RegTech Awards have been revealed, with winning solution and service providers named across categories from best data management solution for regulatory compliance to best innovative solutions for specific regulations, best reference data for regulatory compliance, best trade surveillance solution, best voice and mobile messaging solution, and the most innovative use of AI for compliance. As well as specific product and service categories, the awards covered the best alliance between solutions providers addressing regulatory compliance, and legal and consultancy regulatory services – see complete list of categories and winners below.

The awards were presented by Tim Lind, principal at RTech Advisors, at a well-attended ceremony after the close of A-Team Group’s RegTech Summit for Capital Markets in New York. The awards recognise both start-up and established RegTech solutions and service providers, with winners being nominated by vendors and users, and votes then being cast by members of A-Team’s Data Management Review and Intelligent Trading Technology communities.

Lind said: “It is a privilege to present the first A-Team Group RegTech awards and recognise some of the leading vendors and start-ups offering RegTech solutions designed to significantly improve the regulatory response and provide efficient and effective compliance. Never before has the industry been under such pressure to change its approach to compliance technology, and it is RegTech that will lead the way.”

The winners are:

Category Award winner
Best Data Management Solution for Regulatory Compliance Asset Control
Most Innovative Use of a Vendor Solution to Address an FRTB Requirement GoldenSource
Most Innovative Data Privacy Vendor Solution Solidatus
Most Innovative Use of a Vendor Solution to Address Data Governance Joint winners: Collibra and Fenergo
Most Innovative Use of a Vendor Solution to Address a Dodd-Frank Requirement AxiomSL
Most Innovative Use of a Trade Surveillance Solution to Address the Volcker Rule Requirement Bloomberg Vault
Most Innovative Use of a Vendor Solution to Address the IRS 871(m) Requirement IHS Markit
Most Innovative Benchmark Regulations Vendor Solution RIMES RegFocus BMR
Most Innovative Use of KYC Software for Client On-Boarding iMeta Technologies
Most Innovative Digital Identity Solution Thomson Reuters KYC as a Service (formerly Org ID)
Best Best-Execution Solution Bloomberg
Best Algorithmic Tagging/Classification Solutions FactSet
Best Time Synchronisation Solution Chronos Technology
Best Analytics Solution to Address Capital Requirements/Liquidity Risk Corlytics
Best Reference Data for Regulatory Compliance Thomson Reuters
Best Trade Surveillance Solution Nasdaq SMARTS
Best Trade Repository for Regulatory Disclosure UnaVista London Stock Exchange Group
Most Innovative Use of AI in a Regulatory Compliance Solution IBM Watson
Most Innovative Compliance as a Service Solution Domus Semo Sancus (DSS)
Best Regulatory Alert Management Solution Trillium Surveyor
Alliance win: Best Alliance Between Solution Providers to Address Regulatory Compliance iMeta Technologies and Lysis Financial
Best Regulatory Legal Service - Europe Allen & Overy
Best Regulatory Legal Service - North America Davis Polk
Best Regulatory Consultancy - Europe KPMG
Best Regulatory Consultancy - North America Deloitte
Best Voice and Mobile Messaging Solution Provider Truphone

 

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Author: ateamgroup
Posted: November 20, 2017, 11:18 am

By Rafael Bloom, director at change management consultancy Salvatore

Markets in Financial Instruments Directive II (MiFID II) and General Data Protection Regulation (GDPR) are landmark pieces of legislation in their own right – but there is one overarching phenomenon that explains the need for these and other such regulations that are springing up across industry verticals.

It turns out that all the talk about Big Data over the past few years was a serious understatement. Data volumes were already big when the term was coined, but are now growing at such a rate that legislation is necessary to protect us all from an unstoppable deluge. It would be nice to think society could adjust naturally to a world of big data, but the evidence to the contrary is clear: unless we are forced to change, mistakes will be made that lead to the erosion of individual privacy, the loss and subsequent misuse of personal data, and the accumulation of unacceptable systemic risks which could conceivably trigger a major societal disruption.

If we can agree that such a profound set of changes will not happen organically, then we can begin to understand that legislation is necessary as the prime mover for change. A robust regulatory structure will tip the balance away from data issues being a ‘cost of doing business’ and towards a culture in which negative consequences for non-compliance outweigh the cost.

GDPR

We must hope that the new wave of data-centric regulations strikes the right balance between impractical heavy-handedness and the reality of putting in place necessary adjustments to technology and processes. After all, most institutions that already comply with the 1990s data protection rules, such as the UK Data Protection Act of 1998, should only have to make minor adjustments to meet new standards. The European GDPR rules around personal data, which come into force in May 2018, extend the scope of the existing regulation, taking in data processors as well as data controllers, and deepening the understanding of what personally identifiable data (PII) is, and the need to include data points such as IP addresses and location data.

In essence, because GDPR functions by endowing data subjects with enhanced rights over their PII, it lets institutions decide for themselves how to make sure such rights are respected. Broadly speaking, this amounts to institutions being able to demonstrate the steps they took to protect personal data over its lifecycle and respect individuals’ data subject rights. When a breach occurs, what an institution did to prepare for the event will have a significant bearing on consequences.
GDPR raises the bar for information governance in society as a whole, and those who bemoan its coming fail to grasp the significance of the new era of rapid data growth. Without it, we are exposing a soft underbelly to those who would use personal data as a tool to commit crimes, to discriminate against certain groups, or to destroy the mutual trust we need to hold an economy together. It would be ridiculous to see legislation as a panacea for these things, but at the same time it would be irresponsible to enter this technological phase without appropriate standards being set and the tools to enforce those standards being put in place.

GDPR is being made the poster child for this legislative trend, which is understandable since it is not industry-specific and affects citizens directly, and also because it is a compelling event that can be used to sell solutions and services. What it really signals is the need for effective governance over data operations, that justice is seen to be done.

Across emerging fintech and regtech industries, one unifying factor is the ability of data to shine a light on the truth. This is the essence of the wave of digital transformation that is changing the way we perform daily tasks from ordering a taxi to executing a block trade. Those who make use of digital transformation will profit, just as those who do not risk being left behind. Just ask the ex-CEOs of Kodak and Blockbuster Video how that went for them.

Digital transformation

Given the confluence of these factors, digital transformation is far from being a fad, but it is also defined in different ways by different sectors. There is value in being able to identify commonalities, and one way to do this is to acknowledge differing levels of ‘digital maturity’. This means digital transformation should not merely be focused on digital tools, but also on helping individuals adapt to new patterns of behaviour.

A proper data governance structure is key to this aim and it must involve all stakeholders within a business, from IT and legal, to financial, customer-facing and human resources functions, with a Data Protection Officer (DPO) leading the charge. Challenges like GDPR should be approached in a holistic manner, rather than forming a committee for each separate challenge and driving actions down through a company’s divisions. We should acknowledge that irrespective of individual regulations, investment in people, coupled with the proper understanding of and control over data lifecycles is essential to effective digital governance.

Rafael Bloom is director of Salvatore, a strategy and change management consultancy, and a founder member of the Digital Governance group together with Atom Consulting and TMotions Global.

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Author: ateamgroup
Posted: November 17, 2017, 3:01 pm

Know Your Customer (KYC) and anti-money laundering (AML) regulation are hot topics crying out for a regtech approach that will ease the burden of manual processing and deliver automated and accurate information on subjects of interest.

View the RegTech Summit for Capital Markets' comprehensive agenda here

We talked to E. Jay Saunders, chairman and CEO of Domus Semo Sancus (DSS), about the challenges of KYC And AML and the DSS SafteyNet.ai regtech solution, ahead of tomorrow’s A-Team Group RegTech Summit for Capital Markets in New York. At the event, Saunders will join a panel of expert speakers that will discuss how to apply innovative technologies to manage risk and improve onboarding, KYC and AML.

Q: What does RegTech mean to you?

A: Technologies that are primarily designed to help entities meet obligations and requirements set by the regulator of the industry for which they provide products and services, particularly within the financial services industry.

Q: What regulations are of primary concern to you and your customers?

A: Know Your Customer (KYC) and anti-money laundering regulations.

Q: What problem do financial institutions have that you believe you can solve?

A: We can help clients know their potential client – KYC – at a level whereby they can get an in-depth understanding of the potential risk that those clients may represent.

Q: Why do they have this problem?

A: KYC is a recommendation of the Financial Action Task Force on Money Laundering (FATF) and is a requirement set by local regulators to combat the financing of terrorism, money laundering, and other exploits of the global financial system.

Q: How do you solve the problem?

A: Through a combination of the largest datasets of global sanctions lists, watch lists, and persons in public life lists, and customised crawlers that monitor thousands of global feeds in real time including those that contain biographies, global addresses, business dealings, court records, criminal registries, government records, gazettes, curated news, leaked files (like. The Panama Papers), and others.

The data is managed by an artificial intelligence (AI) engine that uses natural language processing and machine learning to gain insights into the data and to understand the relevance and context of each piece of information based on an industry-specific taxonomy. When an enhanced due diligence search is performed on a subject of interest, the AI engine pulls all the information it has gathered on the subject – from within the surface, deep and dark web, and within an organisation's internal data – and that it deems relevant to the end user.

The information is sorted and categorised by information type. For select types of information, the AI engine provides on-the-fly insights and connections pulled from specific pieces of data during document deep dives. During the enhanced due diligence check, the end user can accept or reject the findings of the AI engine and can also add his or her own insights and notes to the final profile report.

Q: What technology do you use?

A: We use IBM Watson, Amazon Web Services, BlueMix, Drupal, Solr, and others.

Q: How do you fit into a financial institution’s architecture and data flows?

A: We fit in when a firm is performing customer onboarding and when its doing a regular review of a client's file.

Q: What other cool RegTech companies have you seen out there?

A: IBM and LexisNexis.

Q: Why are you taking part in A-Team’s RegTech Summit for Capital Markets event?

A: To meet other players in the market and help my product, SafetyNet.ai, gain top-of-mind interest with attendees at the Summit.

Q: What type of people are you hoping to meet at the Summit?

A: People whose organisations are required by the regulator to perform enhanced due diligence checks on potential clients, as well as people from organisations who cannot afford to make a mistake and do business with entities that may result in a fine to the organisation or a negative hit on the organisation's reputation.

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RegTech Summit for Capital Markets - New York City, 16th November 2017
Author: ateamgroup
Posted: November 15, 2017, 1:56 pm

Thomson Reuters will release the results of its second global survey assessing the impact of regtech and fintech on the role of compliance in financial services firms at this week’s A-Team Group RegTech Summit for Capital Markets in New York. The survey included compliance and risk practitioners from nearly 800 financial services firms across the world. The results indicate an increase in favourable opinion of regtech compared to last year, and a significant gain in the number of respondents that have implemented a regtech solution, in most cases on the basis of improved efficiency and effectiveness.

View the RegTech Summit for Capital Markets' comprehensive agenda here

Ahead of the A-Team RegTech Summit for Capital Markets, we caught up with Todd Ehret, senior regulatory intelligence expert, Thomson Reuters Regulatory Intelligence, who will present the survey results and discuss regtech and compliance at the event with his colleague Sean Beals, global head of Regulatory Intelligence, Risk, Thomson Reuters.

Considering the increasingly positive view of regtech detailed in the Thomson Reuters report – Fintech, Regtech and the Role of Compliance - 2017, co-authored by Stacey English, head of Regulatory Intelligence for Thomson Reuters, and Susannah Hammond, senior regulatory Intelligence Expert for Thomson Reuters – Ehret notes a drive towards business decisions made on productivity, efficiency and costs. He explains: “From a US perspective, the post-crisis implementation of Dodd-Frank led to four or five years of significant investment, change and strengthening of compliance departments. Over the past couple of years, firms have been looking at where money has been spent, what has been built, and how it could be made more efficient.” The need for cyber resilience and emergence of new technologies are also driving interest in the potential of regtech.

Ehret adds: “Today’s compliance department is somewhat similar to where trading desks were 15 years ago. There was an abundance of traders everywhere doing things manually. Most were steadily replaced by computers and automation despite increasing trade volumes.”

As pressure on risk and compliance has increased, so too has the need to deploy specialist skill sets, particularly around fintech and regtech solutions. The Thomson Reuters survey shows 75% of respondents reporting a widening of skill sets and 28% investing in specialist skills in 2017. This is up from 56% in 2016, with 15% investing in specialist expertise.

Ehret comments: “There is no longer a great demand for generalists in compliance, the need is for highly specialised skill sets as the compliance function shifts to regtech.” This is expected to be reflected in budgets, with more spend being allocated to regtech solutions and less to large compliance teams.

In terms of regtech products, the Thomson Reuters survey found the number of respondents that had already implemented a solution almost doubled in 2017 to 30%, up from 17% in 2016. Among the most widely implemented are regulatory change monitoring and risk solutions.

Looking at compliance and regulatory risk management on a macro level, the impact of regtech is expected to be significant, but not at any cost. While Thomson Reuters reports the top three areas of impact in 2017 as interpreting regulations and their impact, implementing regulatory change and capturing regulatory change, Ehret warns that budgets remain a concern. He explains: “Many firms still look at compliance as a cost rather than a revenue centre and are reluctant to increase budgets. However, if compliance can do more with regtech solutions at no or little more cost, there will be increased implementation. And as solutions become more sophisticated and firms more efficient, regtech adoption will rise, although cost will always be a concern.”

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RegTech Summit for Capital Markets - New York City, 16th November 2017
Author: ateamgroup
Posted: November 14, 2017, 8:02 pm

Thomson Reuters has extended the reference data on its DataScope platform to help firms comply with Markets in Financial Instruments Directive II (MiFID II) requirements. Ahead of the January 3, 2018 MiFID II compliance deadline, Thomson Reuters has added extra information on equities, warrants, options, futures, commodities, funds, government and corporate bonds, collateralised mortgage obligations (CMOs), municipals, and over-the-counter (OTC) derivatives.

DataScope can also help users with MiFID II transparency and reporting requirements by linking reference data, corporate actions, entity data, end-of-day and intraday data.

Stuart Martin, managing director of risk information and learning services at Thomson Reuters, says: “The challenge is clear, reference data has become a real focus point for our customers as they prepare to comply with MiFID II. We are committed to providing solutions that enable our customers to meet growing regulations and the DataScope MiFID II reference data suite of solutions is another step forward.”

The extension of reference data on DataScope, is one of a number of recent MiFID II initiatives made by Thomson Reuters. These include enhancements to the Eikon financial analysis solution for research unbundling, a Legal Entity Identifier (LEI) profiling service, a partnership with BestX for foreign exchange transaction cost analysis, an enhanced analytics platform for best execution and systematic internaliser (SI) determination, and improvements to the company’s tick history feed.

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Author: ateamgroup
Posted: November 14, 2017, 7:27 pm

Yaron Naor, vice president and general manager, Americas, at Arkivum will present the company’s regtech record management and archiving solution based on open source and proprietary technologies at this week’s A-Team Group RegTech Summit for Capital Markets in New York.

We caught up with Naor before the event to find out a little about Arkivum’s views on regtech and its contribution to the market.

Q: What does RegTech mean to you? 

A: Solving immediate and long-term compliance and regulatory challenges globally by leveraging the most disruptive and sustainable technologies, and significantly reducing cost of ownership.

Q: What regulations are of primary concern to you and your customers?

A: SEC/FINRA based record management, Markets in Financial Instruments Directive II (MiFID II) and General Data Protection Regulations (GDPR) data security and sovereignty mandates covering all e-comms.

Q: What problem do financial institutions have that you believe you can solve?

A: Compliance based record management and archiving solutions with data integrity, security and usability as the key ingredients.

Q: Why do they have this problem?

A: Due to the silo structure of the organisation, plus a lack of secured solutions that are in-line with compliance mandates.

Q: How do you solve the problem?

A: By providing a unified data safeguarding platform addressing all major global record keeping mandates. The platform has a modular and scalable architecture, secured data storage, preservation techniques and flexible workflows to process ingested data with stringent encryption algorithms.

Q: What technology do you use?

A: A combination of open source and proprietary technologies.

Q: How do you fit into a financial institution’s architecture and data flows?

A: Through our integration modules driven by industry standard REST APIs.

Q: Why are you taking part in A-Team’s RegTech Summit for Capital Markets event?

A: To increase market and brand awareness, educate market players, develop strategic partnerships and secure several proofs of concepts.

Q: What type of people are you hoping to meet at the Summit?

A: C level execs, key decision makers, compliance, regulatory and data governance officers, and engineering/IT Managers.

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Author: ateamgroup
Posted: November 13, 2017, 1:40 pm

SIX is planning a series of strategic changes aimed at strengthening its competitiveness and that of the Swiss banks that own the company. Among the changes, the group will consolidate its market position in the data business, in particular in international reference data. In the securities business, it will merge its exchange trading and post-trading operations into one organisational unit, with all securities trading services provided from a single source. The group will also set up an innovation unit and establish a CHF 50 million venture fund to promote innovation within Switzerland's financial centre.

The changes will be implemented in the second quarter of 2018 and also include plans to reorganise the company’s payments operation and hive off its card business into a separate business unit.

Jos Dijsselhof has been named as SIX CEO from January 2018 and will oversee the restructure. He succeeds Urs Rüegsegger, who announced in May that he would step down. Dijsselhof has a track record in international financial management with ABN Amro Bank, Royal Bank of Scotland and ANZ Australia & New Zealand Banking Group. Most recently, he was chief operating officer at Euronext in Amsterdam.

The shake-up follows a board level review throughout 2017, resulting in a renewed focus on core business. SIX states: “The board of directors has taken a clear stance in favour of a strong, shared financial market infrastructure in Switzerland. In this realignment, SIX will focus consistently on infrastructure services for its shareholders and the financial centre in securities, payment services and financial information, which form the company's core business. In future, the company will operate exclusively under the SIX brand.”

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Author: ateamgroup
Posted: November 10, 2017, 4:59 pm

Opus and Fenergo have teamed up to provide an end-to-end Know Your Customer (KYC) system for running anti-money laundering (AML) checks on new clients.

Under the partnership, Opus will feed external data – including sanctions lists, business news, market research, and economic and shareholder information – into Fenergo’s risk scoring and client lifecycle management (CLM) software. The aim is to provide investment, corporate and private banks with an integrated and streamlined client onboarding solution that builds in all the risk-relevant data needed to satisfy regulatory demands of KYC and AML.

Opus and Fenergo say the system will give banks an automated, end-to-end workflow process to help them continuously monitor customers, from onboarding through to offboarding, while providing an integrated view of all data related to regulatory risk.

Marc Murphy, CEO and founder of Fenergo, says: “Our partnership will enable clients to understand complex data sources and develop clearer, quicker views into ID verification, beneficial ownership and customer due diligence relevant content, allowing them to minimise KYC risks.”

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Author: ateamgroup
Posted: November 10, 2017, 4:50 pm

Adoption of the Legal Entity Identifier (LEI) is soaring in response to its requirement for trade reporting under Markets in Financial Instruments Directive II (MiFID II), which takes effect on January 3, 2018. Ben Lis, founder of regtech start-up LEI Smart, will showcase the company’s LEI solution at next week’s A-Team Group RegTech Summit for Capital Markets in New York. We talked to him ahead of the event about regulatory requirements for the LEI, the challenges of getting the data right and the LEI Smart solution.

View the RegTech Summit for Capital Markets' comprehensive agenda here

Q: What does RegTech mean to you?

A: RegTech describes new software services and companies created to help financial institutions address regulatory challenges. The goal is to deliver cost-effective solutions that embody best practice.

Q: What problem do financial institutions have that you believe you can solve?

A: Financial institutions must always have the correct and current LEI data for their clients, counterparties and their own entities.

Q: Why do they have this problem?

A: Regulatory requirements mandate use of the LEI in trade reports.

Q: What regulations are of primary concern to you and your customers?

A: The primary concern right now is MiFID II with its ‘No LEI, No Trade’ requirement. Given the regulation’s scope, it’s hard to overstate the impact of this mandate. It’s driving LEI adoption in a big way.

Swaps trade reporting is also an ongoing concern. On November 1, 2017, the European Securities and Markets Authority (ESMA) began enforcing new data validation rules for European Market Infrastructure Regulation (EMIR) trade reports that include more stringent LEI validation. The US Commodity Futures Trading Commission’s (CFTC’s) recently published roadmap to high quality swaps data indicates it’s likely to follow a similar path.

In addition to these concerns, there are over 100 other regulatory uses of the LEI that apply in various jurisdictions and to various asset classes.

Q: How do you solve the LEI problem?

A: LEI Smart is designed to get LEI data right and keep it right. It does this in three ways:

Validation: LEI Smart validates existing LEI mappings of client and counterparty data. It checks that LEIs are ISO17442 compliant, registered with the required status in the global legal entity identifier system (GLEIS), and refer to the party in question. These checks are required for compliance with MiFID II and other regulations.

Smart Matching: Populating missing LEIs is a time-consuming challenge. The client name in your system is not likely to be an exact match to its legal name in the GLEIS. LEI Smart will streamline this task by using natural language processing (NLP) to find the best match.

Alerting: Once your data has been mapped and validated it must be actively maintained to remain compliant. The LEI is static, but the data it references is not. Funds get merged or closed. Ownership changes. Entities move jurisdictions and change their legal name. LEI Smart continuously monitors the GLEIS for changes like these that impact your data and proactively notifies you when they occur.

Q: What technology do you use?

A: LEI Smart is a cloud-based service hosted on Amazon Web Services (AWS). The LEI Smart server is written in the Python programming language and uses the Flask web development framework. Our database is PostgreSQL. JavaScript is used for our web console.

Python is widely used in finance and has extensive libraries for data analysis, NLP and machine learning suit us well for both current and future development. We use the customisability of PostgreSQL and its support for hierarchical queries, which will serve us well as use of LEI level 2 data, ‘who owns whom’, expands in the coming year.

Customers interact with LEI Smart via our web console and file upload. They can also use our REST API to integrate with us via their programming language of choice. LEI Smart is exceptionally easy to adopt.

Q: How do you fit into a financial institution’s architecture and data flows?

A: The two natural integration points for LEI Smart are customer onboarding and compliance. The customer onboarding team is often responsible for maintaining the client database. LEI information has become a critical component of that client database and keeping it current and correct is not an optional activity.

Compliance uses LEI Smart to validate the LEIs used in trade reporting and to monitor its firm’s own LEIs. It is not uncommon for financial institutions to have hundreds of legal entities and tracking them in one central location is a challenge.

Q: What other cool RegTech companies have you seen out there?

A: Being cool in RegTech means being effective. Being effective means delivering a practical solution to a specific regulatory challenge. That type of solution is much more likely to be produced by people who have faced the challenge.

RegTek Solutions, which provides trade reporting software and services, is a company that meets this definition of cool.

Q: Why are you taking part in A-Team’s RegTech Summit for Capital Markets event?

A: LEI Smart is a RegTech solution for capital markets so it’s a natural fit. A-Team Group events attract many leading regulatory data management practitioners.

Q: What type of people are you hoping to meet at the Summit?

A: People who can benefit from LEI Smart and who can help us make it even better. We view our customers as our collaborators.

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RegTech Summit for Capital Markets - New York City, 16th November 2017
Author: ateamgroup
Posted: November 9, 2017, 11:27 am

Asset Control has teamed up with DataStax to deliver a cloud based, NoSQL market and reference data platform. The platform is powered by DataStax Enterprise, integrated with Asset Control’s AC Plus enterprise data management (EDM) solution, and addresses issues around data volume, speed and access.

Asset Control considered a number of technologies to support a data platform before selecting DataStax Enterprise for its support, scalability and inclusion of technologies such as Apache Cassandra and Spark, and capabilities such as Solr enterprise search and enterprise-level security. The integration creates golden copy data in AC Plus and provides storage, manipulation and access in DataStax Enterprise.

The company has designed the integration to reduce the time to deliver data to Asset Control users and allow both business and operational users to quickly and easily access market data, including sources that do not require a traditional mastering process, such as alternative datasets and proprietary data.

Martijn Groot, vice president of product management at Asset Control, explains: “The platform provides a scalable store for data that is mastered in AC Plus and provides a number of ways business and operations can access the data, for example using the Solr search capability or RestAPI in the DataStax Enterprise stack. Benefits of the platform include its deployment as a cloud or hybrid solution, its scalability, and its fast and easy access to data for business users.”

He suggests some Asset Control users will replace internal data stores that do not operate fast enough to meet today’s business needs for market data with the new platform, and says many clients are interested in the concept. The platform is being built with a large sell-side client and is due to be in production by early 2018.

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Author: ateamgroup
Posted: November 8, 2017, 12:56 pm

In a financial world driven by data, delivery is critical. Ahead of next week’s RegTech showcase at A-Team Group’s RegTech Summit for Capital Markets in New York, we talked to Patrick Poulin, CEO of regtech API Fortress about the company’s views on application programming interfaces (APIs) and its platform for API testing automation.

View the RegTech Summit for Capital Markets' comprehensive agenda here

Q: What does RegTech mean to you?

A: It means finding ways to facilitate and automate the way we satisfy strict regulations. While sometimes overbearing, regulations are a necessity in an increasingly fast and complex tech ecosystem. So, we should be leveraging the power of computers for a lot of that work.

Q: What problem do financial institution have that you believe you can solve?

A: Financial institutions are all about data, which travels by application programming interfaces (APIs). The data is time sensitive and has to be accurate. Unfortunately, APIs are minimally tested and monitored today. We built API Fortress specifically to quickly catch institutions up and make sure their data is coming in quickly and accurately.

Q: Why do they have this problem?

A: Testing a new technology always lags behind building it. It can often take years before a company finds the time to dedicate time to solving the data problem. Until API Fortress, this required a huge amount of manual work from developers and quality assurers. With our platform, anyone can do the work in minutes.

Q: What regulations are of primary concern to you and your customers?

A: The EU revised payments directive, PSD2, is a big one for us, as the transfer of personal data means you run the risk of releasing data that may not supposed to be exposed.

Q: How do you solve the problem?

A: Our platform analyses entire payloads and makes sure the data is in the right format and accurate. It only sends the information that it was supposed to.

Q: What technology do you use?
A: Our platform is built in JAVA and Groovy, making it very compatible with any system out there.

Q: How do you fit into a financial institution’s architecture and data flows?

A: Our platform can either be in the cloud or within your environment on-premise. It can satisfy any security requirements you may have.

Q: Why are you taking part in the A-Team RegTech Summit for Capital Markets event?
A: API quality is a huge, underreported problem. The RegTech Summit gives us the ability to help make more people aware that the APIs that are critical to their platforms could be costing them millions of dollars.

Q: What type of people are you hoping to meet at the Summit?

A: Anyone in charge of data quality (strategists or architects), IT people, platform developers and quality assurers.

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RegTech Summit for Capital Markets - New York City, 16th November 2017
Author: ateamgroup
Posted: November 8, 2017, 11:05 am

By Bill Hodash and Eugene Ing, DTCC

Next year will mark a decade since the financial crisis. Since then, a wave of regulatory reforms has been implemented to increase the transparency and resiliency of the financial system, including the mandate to use legal entity identifiers (LEIs) across many jurisdictions. The goal is to ensure that global regulators, especially those charged with monitoring systemic risk, can accurately identify entities involved in financial transactions and the relationships and affiliations between them.

Next year will also mark six years since the introduction of what was formerly known as the CICI (CFTC Interim Compliant Identifier). The CICI was originally mandated by the CFTC in 2012 for regulatory reporting and record keeping prior to the availability of the global LEI. To enable the industry to comply with this requirement, the CFTC designated DTCC and SWIFT as the issuers of CICIs. The two firms jointly founded the CICI utility, the forerunner of what is known today as the Global Markets Entity Identifier Utility (GMEI utility). This was among the first of more than 30 Local Operating Units (LOUs) worldwide to have been established under the Global LEI System (GLEIS).

Legal entity identifiers

In the following years, the industry and regulatory communities have come a long way, and today, policymakers across the world acknowledge the importance of making the identification of counterparties mandatory for many global regulations beyond those related to derivatives reporting. As such, the number of LEIs issued has grown significantly to over 700,000 globally. The GMEI utility, which operates as the largest globally accredited LOU, has issued nearly 300,000 LEIs to date.

In Europe, Markets in Financial Instruments Directive II (MiFID) II, which will be implemented in January 2018, has mandated the use of the LEI as a requirement for trading and transaction reporting. For some legal entities, this will be the first time they’ve come under the purview of financial market regulations related to LEIs. In fact, the European Securities and Markets Authority (ESMA) recently issued clear guidance advising that any legal entities, regardless of where they are domiciled, must obtain an LEI if they plan to trade directly in Europe. This makes it paramount for firms to be proactive in acquiring an LEI to avoid compliance risk and to minimise the potential for delays to occur in acquiring their LEI due to any backlogs.

Data quality

However, firms must remain cognisant of the quality of the reference data underpinning their new LEI. In other words, not all LEIs are created the same, and choosing expediency over quality could negatively impact the regulator’s ability to perform systemic risk analysis. Data quality is the linchpin of the system, and the LOUs that a firm chooses to work with is essential because the provider must be relied upon to validate the accuracy of the LEI reference data accompanying the LEI record at time of registration and whenever information about that legal entity changes.

It is also the responsibility of the LOU to work with market participants and the Global Legal Entity Identifier Foundation (GLEIF) to continuously optimise the quality, reliability and usability of the LEI and associated reference data in meeting the LEI’s purpose: improving systemic risk analysis. By doing so, not only will market participants’ operational costs be reduced, but also they can have peace of mind that they can comply from day one with the MiFID II requirements.

For regulators, the LEI is a key enabler to ensuring the soundness of the global financial system by allowing them to quickly and consistently identify counterparties to financial transactions and to more accurately aggregate risk exposure across asset classes, geographies and affiliates of legal entities.

As one of the original LOUs, we have been working for many years with the industry and supervisors to improve entity reference data quality. Our foremost priority has been to make the necessary investments in processes to validate the accuracy of reference data before and after it’s published. Our experience tells us that quality LEI registration and renewal takes more time than it would to just simply accept a registrant’s data and publish it out to the world. We’ve made a commitment to quality because there is too much at stake if LOUs fail to fully validate the accuracy of the data and continually invest in improving validation processes.

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Author: ateamgroup
Posted: November 8, 2017, 10:46 am

Financial systems provider Finastra has been chosen ahead of five competitors to provide Kuwait-based investment company KAMCO with a single software platform that will integrate all the company’s asset management operations.

Finastra’s Fusion Invest product will support KAMCO as it aims to scale up its business, extend asset class coverage and expand the range of investment solutions it offers. KAMCO says Fusion will provide automated workflows, consistent data and accurate risk analytics. Through the integrated Insight micro service, KAMCO portfolio managers will be able to give investors increased visibility of their assets and associated risk scenarios on the go.

Finastra won the KAMCO contract in a competitive pitch against five other solution providers. Fusion Invest was chosen based on its ability to support KAMCO’s growth plans through its core functionality, and its capacity to increase automation, reduce costs and boost collaboration across the organisation.

Khalid Owaida, head of IT at KAMCO, says: “Fusion Invest provides us with the scalability and functionality we need to expand our business, enhance our performance and also support our hedging and risk management capabilities. We view Finastra as a strategic partner.”

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Author: ateamgroup
Posted: November 8, 2017, 10:40 am

Management buy-in, cultural change and legacy systems can be barriers to the adoption of regtech, although the barriers are beginning to lower as regtech solutions show potential to fulfil business use cases and provide cost benefits.

In the run-up to A-Team Group’s RegTech Summit for Capital Markets on November 16, 2017 in New York, we asked Nikhil Aggarwal, fintech entrepreneur in residence at iValley Innovation Center, and a member of a panel session at the event that will look at how to overcome barriers to regtech, about his interest in the technology.

View the RegTech Summit for Capital Markets' comprehensive agenda here

Q: What does regtech mean to you? Why are you excited about it?

A: Regtech proactively dimensions out and predicts regulatory and compliance risks. This includes building out robust data lakes, enhancing reporting routines, and leveraging advanced analytics techniques including machine learning and artificial intelligence.

It’s particularly exciting to note that financial institutions are applying regtech solutions to a diverse set of use cases including enhanced regulatory reporting, robust biometric and digital identity management, and streamlining of Know Your Client (KYC), client due diligence (CDD) and anti-money laundering (AML) efforts. As a result, banks and financial institutions will be better placed to address a range of national and international regulations including the EU revised payments directive, PSD2, Anti-Money Laundering Directive 4 (AMLD4), extensions to the US Department of Financial Services’ Part 504 of banking law, and Markets in Financial Instruments Directive II (MiFID II).

Q: What is your biggest regulatory challenge?

A: Adoption and implementation of regtech efforts have not always been consistent due to the evolving nature of compliance taxonomies. There is also an opportunity to deepen public-private engagement. Regulators are uniquely positioned as they see data points across both institutions and jurisdictions. They must proactively share their views on emerging risks, dimension out and provide guidance on new regulations.

Q: Why is it such a challenge?

A: The core challenge of regtech, especially from the solutions providers’ perspective, is to bridge the gap between risk management, business leadership and technologists. Often, the value proposition and the sales cycle focus on a pre-defined technology product that may not capture a broader set of evolving risk nuances. As a result, a proposed solution may check the technology boxes, but will not address all the underlying regulatory, compliance and operational risks.

Q: What role do regtech providers have to play in helping solve the challenge?

A: Regtech providers must ensure their offerings are holistic in nature. This means solutions must specify which risk typologies and taxonomies are being addressed, ensure that data flow and architectural design, as well as metrics, reporting and dashboard modules are robust, and ensure that more sophisticated analytics approaches are used to address underlying risk and operational issues.

Hiring domain experts to complement strong technologist benches will enable regtech providers to develop meaningful and robust solutions and, most importantly, validate that their set of solutions is both relevant and current. Further, clear articulation and education need to be a core part of client engagement.

Q: What cool or interesting regtech firms have you seen out there?

A: Amberoon, a regtech provider based out of Silicon Valley has developed a ‘system of insights’ that leverages advanced analytics to dynamically uncover unknown AML risks.

Backrail Technologies, another regtech startup, is focused on applying machine learning and artificial intelligence to analyse cross-border payments data to risk rate transactions in real time.

Aggarwal will be joined on the RegTech Summit keynote user panel, Overcoming the Barriers to RegTech, by Thomas Dunlap, former managing director, global head of enterprise data strategy at Goldman Sachs; Tammy Eisenberg, director, investment management risk and compliance at BNY Mellon; Subas Roy, chairman, International RegTech Association (IRTA); and John Stecher, managing director, group head of open innovation at Barclays.

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RegTech Summit for Capital Markets - New York City, 16th November 2017
Author: ateamgroup
Posted: November 6, 2017, 1:27 pm

Interdealer broker TP ICAP has named Eric Sinclair as CEO of Information Services, the company’s data and analytics division. Sinclair will replace Frank Desmond who is leaving the company after 12 years of service.

Sinclair will join TP ICAP on November 13, 2017, moving on from the Toronto Stock Exchange (TMX) where he spent 14 years, most recently as president of the Markets Insight division. Before working at TMX, Sinclair held senior executive roles at Spectra Securities Software and Reuters.

Desmond leaves TP ICAP after a short stint as CEO of the company’s data and analytics business, and a seven-year stretch as CEO and managing director of Tullett Prebon. Before joining Tullett Prebon, Desmond was global head of content at Reuters.

John Phizackerley, chief executive at TP ICAP, comments: “Eric will play an instrumental role as we look to expand our products, services and analytics capabilities, accelerating our plans to develop our Information Services division. I would also like to take this opportunity to thank Frank for his tremendous dedication to the company over the years. I wish him all the very best for the future.”

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Author: ateamgroup
Posted: November 2, 2017, 12:59 pm

By: David Pagliaro, EMEA head of State Street Global Exchange

Our CEO once commented: “Over our long history, periods of significant regulatory change have provided the greatest opportunities.” This couldn’t be more true today. Since the global financial crisis, a plethora of regulation has been introduced and enforced. While the pace of new regulatory initiatives has ebbed, the consequences of such change are vast and remain in play.

For the largest banks the heavy lift is almost complete as they were the focus of earlier waves of regulation; insurers are reaching the tail end; and for asset managers it is slightly more intense today. Overall, institutions are notably better prepared when it comes to regulation.

However, the need for the right data remains critical. Building efficient processes in the face of new data and reporting requirements is a significant challenge. While it can appear overwhelming at times, tackling what is required through a simple framework is a good starting point. For example:

1. Identify required information/risks

2. Aggregate and normalise data

3. Perform any required calculations

4. Report

This framework is particularly effective as it can be applied to any regulation, whether it is Solvency II, the Alternative Investment Fund Managers Directive (AIFMD), Packaged Retail and Insurance-based Investment Products (PRIIPs) regulation, or Markets in Financial Instruments Directive II (MiFID II).

We see institutions concentrating on the first three steps, investing in new data management technologies and seeing meaningful results.

While many risk analytics and reporting procedures are standardised these days, innovative technologies are also coming to market. Firms are making increased use of new data and analytics tools and services, and using machine learning to help interpret the data.

For example, we are piloting a machine learning tool for chief risk officers, which builds ‘intelligent networks’ based on a client’s portfolio. An example of how it could work goes like this: There’s been a copper mine explosion in North America. Based on the data the client has given us, we know they have a high weighting in Apple, which uses copper when making its iPhones. This explosion will cause a spike in the copper price. So, the tool would then send an alert to the chief risk officer to inform them of this.

How has this evolution come to pass?

Regulations and the solutions required to comply with them have evolved. There are examples where regulation is introduced at a high level – with some high-level principles defined – followed by a series of technical specifications. In response, affected institutions rush to create operations in order to comply. Then, usually following a few reporting periods, the financial institutions take a step back and review whether the system they have implemented is fully effective. Similarly, regulators also question whether a regulation is working as intended.

There are many examples of financial institution realising they developed something so quickly it is not necessarily fit for purpose. For example, when banks initially had to comply with stress testing rules it was predominantly an exercise completed by an army of consultants. This eventually evolved into a technical system, which has also evolved as time passes. Similarly, we have examples of clients that introduced a Solvency II reporting solution that needed to be updated with something more scalable from a data management perspective.

There are also a handful of examples where the regulator dials back or expands certain technical requirements. A recent example is PRIIPS, which is an evolution of Undertakings for Collective Investment in Transferable Securities (UCITS) Key Investor Information Documents (KIIDs). Both are meant to be standardised, comparable fund summaries for retail investors. Both are meant to show key features of an investment (e.g. time horizon, underlying investments, risk levels, etc.) in a consumer-friendly format. UCITS has included KIID requirements since 2011, while the PRIIPs Key Information Document (KID) is for non UCITS retail funds. Existing technologies can be adapted to address the broader scope of PRIIPs KIDs.

What next?

At this pivotal point of regulatory and technological evolution, the industry has proven itself to be resilient and, as always, it will find a way to adapt. It will also continue to evolve to maximise efficiencies, drive down costs and manage risks.

At the moment, when it comes to emerging technologies and artificial intelligence, there are a lot of custom, niche solutions being created independently, and not much scale. Over the years, there will likely come a time when these products will be available off the shelf.

The views expressed in this article are the views of David Pagliaro, EMEA head of State Street Global Exchange, and are subject to change based on market and other conditions and factors. They do not necessarily represent the official views of State Street Global Exchange and/or State Street Corporation and its affiliates.

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Author: ateamgroup
Posted: November 2, 2017, 10:03 am

General Data Protection Regulation (GDPR) is a game changer, requiring firms to identify, manage and provide access to individuals’ personal data. Are firms up to speed on meeting the regulation’s May 2018 compliance deadline, or is there still some way to go? Ahead of a panel session on GDPR at A-Team Group’s RegTech Summit for Capital Markets on November 16 in New York, we talked to panel member Nathan Snyder, partner, Brickendon Consulting, about the opportunities of regtech, the hazards of GDPR, and the firm’s response to the regulation.

View the RegTech Summit for Capital Markets' comprehensive agenda here

Q: What does RegTech mean to you?

A: We are seeing our clients evolving from a regulatory project approach to a regulatory operations model. This maturity comes with a recognition that many in-house regulatory systems could be replaced by lower cost and more sophisticated vendor offerings. RegTech is at an exciting transition point, where financial institutions are beginning to understand what is available and what is possible.

Q: What problems do financial institutions have that you believe you can solve?

While there are some challenges, most of Brickendon’s clients actually have opportunities. These opportunities have come about due to the large amount of data regulators have requested over the past 10 years. These large volumes of data processing for regulations are actually a treasure trove of information and insights. We are working with our clients to move from descriptive data processing to predictive information analysis. Brickendon has used information analysis to accelerate data adoption programmes for one of its clients by a factor of 12 times, while simultaneously reducing project costs by 50%.

Q: What regulations are of primary concern to you and your customers?

A: Our primary concern is the lack of concern about General Data Protection Regulation (GDPR). This is being seen as a retail-banking-only and compliance-only problem, when it is actually much broader. The opportunity for reputational and financial damage caused by private banking clients, corporate and investment banking clients and ex-employees is significant. The inadequacy of a compliance-only response that does not involve technology and data change will become very apparent when the first instances of non-compliance are reported. Brickendon’s GDPR working group has published a paper on the five-pronged approach required and we are working with several of our clients on implementation.

Q: How do you solve regulatory problems?

A: By bringing together compliance, data and technology organisations. Brickendon’s consultants have extensive expertise in these areas and in implementing solutions that addresses business and business-support data uses.

Q: What technology do you use?

A: There are a number of semantic technology vendors that can be used in this space. However, vendor choices need to fit into a financial institution’s wider data strategy and we use what is right depending on the project.

Q: How do you fit into a financial institution’s architecture and data flows?

A: Brickendon Consulting works with its clients to strategize, design and implement architecture and data flows. Our capabilities allow us to truly partner with our clients and create a highly adaptable data strategy with flexible implementation that allows clients to respond to market and regulatory challenges while taking advantage of innovative technologies.

Q: What other cool RegTech companies have you seen out there?

A: We’re currently in partnership discussions with several regulatory reporting, semantic technology and machine learning organisations – watch this space.

Q: Why are you taking part in A-Team’s RegTech Summit for Capital Markets event?

A: We’re regular attendees and speakers at A-Team events. We love hearing about the concepts and products in our community and participating in challenging discussions with our peers. We are also keen to showcase our extensive experience and transformational solutions for market challenges.

Q: What type of people are you hoping to meet at the Summit?

A: I am sure we will meet people who have designed innovative solutions for the opportunities and challenges we share in our industry. At a personal level, I want to meet anyone with a controversial viewpoint! Brickendon is a transformational consultancy, so we are keen to meet people who we can partner with to truly transform their business.

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Related: 
RegTech Summit for Capital Markets - New York City, 16th November 2017
Author: ateamgroup
Posted: November 1, 2017, 10:58 am

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