Risk and Regulatory
The EKG aligns the meaning of business and regulatory data at a granular level. This helps financial institutions and market authorities model complex relationships and unravel the nuanced obligations that exist between financial products, legal entities and transactions.
• Regulatory Reporting
• Data Privacy
• Systemic Risk Analysis
Problem
The 2008 financial crisis and several high-profile compliance breakdowns continue to push the scope and complexity of financial regulation. Global regulators are increasingly emphasizing surveillance supported by more stringent reporting requirements. Firms are under pressure to produce defensible and trustworthy results.
Impact
Tracing the operational impact of new and proposed regulatory changes requires armies of subject matter experts for one-off mapping and internal analysis. Firms have difficulty aligning existing point solutions, creating linkages between related elements and synchronizing independent systems. These difficulties, if not overcome, result in excess reserve capital, regulatory constraints and reputational damage.
Solution
The EKG stores information on policies, legal and reporting requirements across your business and regulatory jurisdictions as precisely defined data elements and machine-executable business rules. These are linked to ontologies that map the language of internal systems to the external world and make it easier to adapt to rule changes and understand impact. Audit and lineage trails are also stored and linked in EKG to prove how reports are constructed and data is sourced.
Regulatory Reporting
A global bank reports to multiple regulators and central banks across a complex portfolio of products, services and business structures. The impact of each regulatory change must be analyzed and orchestrated across interconnected systems. Each regulation is decomposed and stored in an EKG and mapped to polices, internal and external data standards, data definitions, calculation rules and information about data lineage and systems of authority. This gives a more complete view for future change activities.
Data Privacy
A multinational organization is implementing multiple data privacy requirements across different regulatory jurisdictions. The EKG is used to map data privacy policy statements to legal requirements and to the data elements and data sources. It is then connected to internal data lineage flows and to business purpose usage for each type of PII or sensitive data type. This enables full end-to-end traceability and helps in the review of data sharing agreements, changes in privacy laws and subject access requests.
Systemic Risk Analysis
A global investment bank uses the EKG to perform linked-risk assessments across multiple divisions to determine exposure and assess contingent cash flow. Scenario-based simulations are analyzed to understand degrees of interconnectedness, funding durability and transmission of risk. The EKG enables the bank to model complex contagion scenarios and better understand transitive relationships as part of management efforts to ensure the overall stability of the bank.