Centralizing Data Governance for FINREP and Regulatory Compliance

Authors: Susan Cotter, Pat O'Sullivan, Julie Forgo

Managing data governance compliance for financial services regulations can be a daunting task. Leverage the tools provided with IBM Knowledge Catalog to implement and accelerate your governance strategy. Start with a predefined business vocabulary you can tailor for the needs of your institution. Use a predefined dashboard to monitor and deliver insights for your governance framework.

This post describes how to tailor out-of-the-box solutions to accelerate and support your data governance needs for FINREP compliance. While there is a wide range of considerations , some of the key building blocks to help achieve this compliance include:
1. Regulatory governance dashboard that gives you an overarching view of your governance information
2. Knowledge Accelerator business vocabulary that describes your data assets
3. FINREP mappings to focus your governance solution on the regulatory specific topics

Before you begin: What are your compliance goals?

All data governance begins with compliance goals, which are often framed by regulatory requirements. For example, FINrep REPorting (FINREP) is a reporting framework that specifies the financial information that must be disclosed by financial service institutions to supervisory authorities. FINREP is a just one of many mandatory regulations that impose significant burden on the resources of financial institutions.

Regulations and standards require complex auditable data on all financial matters across the entire institution. This information needs to be discoverable, can be presented at different degrees of derivation, used in multiple calculations, managed by, and accessed by different parts of the business. When information is siloed, or locked in a specific use case, the value of the information is denied to other parts of the business. When a new regulation is published, or there is a change in an existing regulation, tracing back through the path of data to understand the impact can be a daunting challenge.

Having a reliable map of the data and how it integrates with regulatory requirements can be a significant aid in meeting regulatory challenges. The good news is that IBM Knowledge Catalog can help you draw that data map and support your compliance measures.

The following image shows a downloadable dashboard that highlights how FINREP business terms relate to the enterprise vocabulary and the status of data sourcing and quality scores.

Explore the three steps for implementing a governance framework dashboard to support your FINREP and other financial services governance projects.

Step 1: Download a Regulatory Governance Dashboard to define your data needs

Before we can choose the right route for governance, we need to ask some questions about the journey ahead of us. For example, what is the scope of the regulatory data? For the required data, what do I have, and where are the gaps? A Cognos Dashboard supported with data from IBM Knowledge Catalog can show you the strengths and weaknesses in your data assets.

Specifically, a dashboard leverages the information from the IBM Knowledge Catalog reporting database to present the details on regulatory topics, data items, mappings, gaps, and other governance information that is used to maintain the quality of the assets. Compliance Officers and other business users can quickly assess mapping coverage, focus on problem areas, identify overlap and assess the impact of new or changed regulatory requirements.

To get started with your mapping, download a starting set of regulatory dashboards and SQL views for use within IBM Knowledge Catalog. These dashboards allow you to start building a view of your regulatory data landscape as you leverage the other features of IBM Knowledge Catalog to collect, profile and map your data assts to your enterprise vocabulary.

The following image shows a representative dashboard that you can use to review FINREP and other regulatory business terms and their assignments to the enterprise vocabulary and data assets. These dashboards deliver insights into data availability for regulation, data overlap and potential re-use between regulations, and the quality of available data. The dashboard supports a data steward or subject matter expert business user in their ongoing regulatory oversight.

To download these sample dashboards and the associated instructions : Regulatory Governance Dashboard

Step 2: Populate the dashboard with a predefined financial regulatory business vocabulary and mapped Data Asset information

Every regulation, standard, or departmental vocabulary might use different terminology to describe a business topic. Key to knowledge governance is the ability to represent that information in a framework that correlates it to a central terminology.

Knowledge Accelerator for Financial Services (KAFS) provides an extensive financial vocabulary that describes the main business concepts of customer, products, services, transactions, communications, arrangements, business activities, etc. and all the characteristics of, and relationships between those concepts.

For example, this image shows a small sample of the business terms describing Portfolios in the KAFS. See Build a curated business vocabulary for your data fabric for more information on how to download and use Knowledge Accelerators to build your business vocabulary.

The KAFS acts as a backbone onto which you can map the data assets for your financial institution. Leverage Knowledge Catalog features such as Metadata Import (MDI) to import the metadata associated with data assets. You can then use Metadata Enrichment (MDE) to profile the data in the asset to determine patterns and frequencies that embellish the asset’s metadata. This gives MDE the training it requires to suggest and assign KAFS Data Classes and Business Terms to the data assets. This process supports and accelerates the cataloguing of your institution’s data assets into governance framework.

The following image shows a sample MDE project where columns are profiled based on their data values and names to identify their likely business meaning. They are then mapped to KAFS Data Classes and Business Terms.

Step 3: Map FINREP terms in IBM Knowledge Catalog

In the final step for this process, we connect the regulatory requirements to this architecture. For FINREP, the business data information is embedded in the rows of the DPM tables such as Domains, Dimensions, and Members, etc. This is the business information a financial institution must source from their data assets. KAFS represents the DPM FINREP business information in a separate Knowledge Catalog category for the EBA DPM / FINREP 3.2.1.

The FINREP business Domains and Dimensions are mapped to the enterprise business vocabulary in the KAFS. The mappings are fully customizable and extendable so that your financial institution can refine the mappings to suit your own specific supervisory needs. Use the Relationship Explorer component of IBM Knowledge Catalog to see a visual representation of your data mapping.

The following image shows an IBM Knowledge Catalog Relationship Explorer view of the data lineage from Business Terms to their mapped data assets.

Mapped FINREP terms provides a Data Steward with the lineage from a regulatory topic to the centralized term that is mapped to the data assets. These mappings allow the Data Steward to understand where the data for the regulation is sourced. When there is a change in requirements or a change in the data assets, impact analysis, gaps and project focus points can be quickly established. The Dashboards present the information so that the Data Steward can see how regulations overlap on the same enterprise business terms so requirements such as data protection can also be managed.

In this image we see a sample of the FINREP Dimension business terms. When we navigate to ‘Holding Company’s’ mapped KAFS business term on the right, we can see how it acts as a central reference to the FINREP term but also to other terms used in Dodd Frank, FATCA and Basel regulatory frameworks.

That completes the basic steps for building your data asset governance dashboard with the support of IBM Knowledge Catalog.

Additional governance features from IBM Knowledge Catalog

This post has introduced a few advantages of using the KAFS accelerator in IBM Knowledge Catalog for establishing your governance framework. Other features that can enhance your governance implementation include:

· Data profiling: MDI/MDE profiles the data assets, providing a data quality assessment of the information in the data asset compared with the established profile patterns. Use this information to grade data assets for regulatory purposes but also to highlight areas for data refinement.

· Extend the out of the box set of rules with new Data Quality Rules based on standards and expectations of the institution. For example, you could design rules to check for missing definitions, tags and classifications or more complex SQL checks to validate data in the columns and rows of data assets. These Data Quality Rules and their results can be visualized in Cognos Dashboards within IBM Knowledge Catalog.

The following example shows the detail of the Knowledge Catalog Data Quality assessment of a data asset. This information can also be used to populate dashboards that monitor and review asset quality across the governance landscape.

Summary

The Knowledge Accelerator for Financial Services from IBM Knowledge Catalog provides your organization with the means to rapidly deploy a set of governance artifacts to kickstart your data financial data governance activities. As financial institutions build on their governance solutions, the dashboards provide valuable business and technical insight into the ongoing oversight of their governance framework.

For more information, check out IBM Knowledge Accelerators and IBM Knowledge Catalog