Panel: Regulatory Overhaul Pushing Firms to Tackle Data Challenges

Firms will have to tackle their data challenges immediately if they are going to be ready for the upcoming regulatory overhaul, according to panelists at the SunGard New York City Day in New York.

Speakers argued that the now fast-moving regulatory debates will inevitably impact the speed at which firms tackle their data challenges, forcing organizations to react quickly to ensure data is reconciled and auditable.

New York-based John Avery, partner, SunGard consulting services, said: "I think it all comes down to the data and the data challenges...whether you are an asset manager, hedge fund manager or a custodian, for example, clearly the need to provide cleaned reconciled data on a very frequent basis to your regulatory body is something the industry may ultimately have to deal with." From a technology and operations standpoint, this may be seen as a dramatic and unintended consequence of reform, he said.

Yet, while the current approaches to data and data technologies can still be challenging to some firms, according to Avery, the costs of compliance post-reform may be very dramatic.

Neil Palmer, partner, SunGard consulting services, said the data management vision some firms have has now become outdated. "We are moving to a scenario where you have all data everywhere all the time, and complexity is the new reality...I don't think we are going to be able to simplify our way out of what is happening with distributed systems and distributed data out there," he said, adding that it is not just the acceleration in the growth of data itself, but also acceleration in the growth of data sources, the number of participants, the complexity and intensity of interactions.

This could also mean there will be a need for changing procedures with new standards. "We are moving to more and more disparate and distributed systems where people are pushing data out that doesn't conform to a specific standard," said Palmer.

Regulatory change is also expected to push firms to further consider focusing on risk management and strategic planning, as well as looking into new asset classes while forcing them to pay greater attention to data management challenges enterprise-wide.

TowerGroup's research director Stephen Bruel said the regulatory requirements are changing the way people think about data and the needs of the business. "Firms now have to think differently, and consider having different processes in place. They have realized when attempting to comply with the stress test mandates that the data processes, risk processes and even decision-making processes they were relying on were not accurate," said Bruel.