How Big Data will be the corner stone of regulatory information systems
by: Thierry Duchamp
Many financial institutions have been adapting their existing information systems to make them comply with post-crisis regulations. Unfortunately, legacy technologies show dramatic limits that cannot cope with regulator’s requests: several years of retention for massive volumes of data, on which banks must extract in very short time when not in real-time.
The paper shows how Big Data technologies can make Risk and Compliance information systems easier to implement. It also describes how the technology turns constraints into business opportunities. Banks must be seen as gigantic data factories. In this context, Big Data technology breaks silos across functions and also breaks limits between the usual paradigms. A single Big Data system actually implements all-in-one: a transactional systems, a business Intelligence system and a compliance system.
In the end, implementing such a system is not only a matter of how it will impact the organization. It is also about how efficient and costly the information is: an accurate system with a lower TCO that breaks the limits of legacy technologies. Spending a lot on a legacy system that do not cope with regulators request does not prevent to pay huge fines anymore.
Achieving this requires solving several technical issues. Big Data technology has progressively been adapted, because its initiators were mainly in the web industry. In this area, “transactions”, “real-time”, “ACID” can hide different concepts and ideas form the ones we use in the finance industry. That is why there is still a niche market for smaller companies providing accurate solutions that can provide a trading room or a Risk department with a Big Data system.
The paper will describe the architecture and the features of Scaled Risk as a software solution. It will also explain why our components are prerequisites to the implementation of Big Data technologies in a financial context. Beyond a simple technical paper, we will present a small set of real-world usages of Big Data for compliance and risk management.
Editors Notes: This entry has been submitted to the FINTECH Book, the world’s 1st globally crowd-sourced book on FINTECH. Readers that enjoyed this innitial abstract are invited to share and like it so that it may be featured in a longer version that will published in the FINTECH Book due to be released November 2015.