MARKETS & ISSUES DATA MANAGEMENT IN BANKING DATA MANAGEMENT IN BANKING UNISERV DATA MANAGEMENT

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1 UNISERV DATA MANAGEMENT MARKETS & ISSUES DATA MANAGEMENT IN BANKING DATA MANAGEMENT IN BANKING CHALLENGE New regulatory instruments such as Basel III mean that banks must now retain considerably more data than in former times. They must also be able to call up correct information in real time for reporting purposes. However, if their data basis does not reach the required standard, any subsequent reports based upon it will be unreliable; fraud protection mechanisms will not take effect and compliance demands cannot be observed. More than ever before, banks today must be able to rely upon their data and provide the increased levels of transparency and respond to the demands of service expected by their customers. SOLUTION Uniserv Smart Customer MDM consolidates and centralises customer data, thereby guaranteeing rapid, company-wide access to authoritative master data. This comprehensive MDM solution ensures that banks have full control over the reliability and traceability of their data, processes and employee interactions. It minimises risks, optimises the fight against fraud, answers the steadily growing demands of risk and compliance management, and thus sets the points for customer-centralised banking.

2 Challenge Customer Loyalty During the past years, companies from the banking and financial services branch have found themselves repeatedly confronted with bad news. The Financial Crisis further increased the pressure on global financial markets, and since then the branch has been making efforts to reinstate its credible image. The key terms in this process are transparency and trust, because the reputation (or simply the good name ) of a bank is the most important prerequisite for sustained customer loyalty. To remain competitive, banks must strengthen their customer s loyalty and optimise customer consultation. Technological advances are having a considerable influence on the banking field, enabling facilities such as online banking offers and self-service terminals. However, another result is that customers are increasingly distancing themselves from their local bank. Personal customer contact in bank branches is reducing because modern customers generally use other channels (online banking, mobile banking, etc.) to communicate with their bank, especially for financial transactions. To strengthen the relationship to existing customers under these circumstances and to optimise consultation are challenges banks must face. Intensive competition reigns in the financial services market today due to the presence of numerous foreign providers, as well as increasing competition from non-banks and near banks. High street banks must face the challenge presented by a saturated market and the hybrid behaviour of their customers, and they must improve their strategy for new customer acquisitions - a particularly difficult task in this situation. Today there is little difference between most banking product offers, therefore to distance themselves from the competition, banks must provide their customers with absolutely perfect service and competent consultation. As a result Know Your Customer (KYC) and Customer Journey are becoming increasingly important topics, because the optimal basis for customer centralised banking is an in-depth understanding of the customer s needs and wishes. Single Source in this context is not only a marketing concept for addressing customers individually; instead its consolidated customer data also provides information relevant for customer risk management, price structuring, and for achieving higher customer satisfaction. In order to have to have the right information in the right situation at the right location and at the right time, high quality data is essential. Eliminate data quality problems Customer loyalty, conformance to legal regulations for avoiding money laundering, and implementation of international accounting regulations (such as IFRS and capital requirements acc. to Basel III) are impossible without authoritative and trustworthy data. Most banks have organically grown IT structures that are difficult to understand and follow. Problems often arise during reporting as well as when actually acquiring data, and these have negative effects on the performance of the entire financial institute. The solution here is to consolidate and centralise all data available, because poor quality data and duplicates frequently exist in company data stocks and in differing IT systems; meaning that the increased demands of risk management as prescribed by BaFin (the German Federal Financial Supervisory Authority) cannot be fulfilled. 2

3 DATA MANAGEMENT IN BANKING An inconsistent data basis also means that effective fraud prevention or reliable matching with embargo lists (sanctions list check) will be equally unsuccessful. Therefore, thorough elimination of data quality problems must have the utmost priority for all banks and financial service providers, and at the same time the processes for data acquisition, data management and financial reporting must also be improved. This all goes to show the necessity for professional data governance. Only then is effective management of customer master data and the resultant precise knowledge about the customer possible - and it is here that Uniserv provides the perfect solution with Smart Customer MDM. UNISERV SMART CUSTOMER MDM Mortgage Stocks Bank Account SINGLE SOURCE FOR CUSTOMER DATA: Most banks have organically grown IT structures that are difficult to understand and follow. With consolidated and current customer data, banks can create individual, personal communication and a targeted customer approach for positive customer experience management. A reliable data base also enables banks to conform to regulations for data protection, storage and disposal, and to answer the demands of risk and compliance management. 3

4 Intensified Demands: BCBS 239 The global financial crisis made it clear: that due to their poor data architecture many banks were not in a position to control their risks correctly and within a reasonable time. The Basel Committee for Bank Supervision (BCBS) reacted by intensifying the regulatory requirements for banks with its Principles for Effective Risk Data Aggregation and Risk Reporting (BCBS 239). pool of information for (group) risk data is essential, because if banks are not in a position to identify group-wide risks and to effectively deal with them, this will have serious effects on the entire financial system! BCBS 239 consists of eleven basic principles relating to the entire company leadership, infrastructure, risk data aggregation capacities and risk reporting of banks. The target being to reinforce risk management of credit institutes. Thus the Basler committee clearly demonstrates the fact that data and data quality in the context of risk control of banks are topics that should not be underestimated, and with BCBS 239 gives them the attention and priority they require. UNISERV COMPETENCE FOR BANKS expert competence and tools for matching millions of master datasets generation of a group-wide customer ID for reporting purposes (Single Source) As from January 2016, national and international systemrelevant banks must have implemented BCBS 239. In concrete terms this means that banks must remedy the deficits of their IT and data architectures and thus be able to better control their financial risks, aggregate risk positions and rapidly identify risk concentrations as required by BCBS 239 particularly in times of stress and crisis. high implementation speed a lean solution and an equally lean implementation project uniform data model without any changes being necessary to existing data models The rules of BCBS 239 present banks with a considerable amount of extra work alongside their regular business. Improvements must be made particularly in the fields of data storage and reporting systems. This means that banks must create clearly higher standards for the quality of their risk data and the speed and flexibility of their reporting. Data storage (data models), the processes of data processing with a focus on securing data quality, as well as risk reporting systems and governance, all move into the focus. A uniform wide-ranging DQ competence first-class reference data multiple interfaces support preparation and extraction of risk relevant data for aggregation and reporting monitoring of relevant KPIs using scorecards 4

5 DATA MANAGEMENT IN BANKING Effective Data Management Companies from the financial branch find Uniserv to be an experienced and reliable partner, capable of dealing effectively with the wide range and complexity of master data management projects. Both customer loyalty and conformance with risk and compliance requirements require precise, integrated and comprehensive data. We at Uniserv have the expertise and competence necessary, and with Smart Customer MDM a solution that guarantees high data quality customer data, as well as being capable of matching millions of master datasets (matching natural persons, legal persons, public budgets, etc.). Smart Customer MDM eases the consolidation of data from the widest range of heterogeneous source systems and e.g., makes reliable risk data available in real time for risk reporting systems. This Uniserv solution also allows generation of a group partner ID. This is then available department and group wide for other bank processes, e.g. for a total evaluation of risks. In other words: A SINGLE SOURCE for customer data! The uniform data quality and systematic provides decision makers with an authoritative holistic image of the company s current position - because the sooner aggregated data is made available the better. The Uniserv solution enables early identification and monitoring of potential new risks. Risk experts can then be notified with a warning in real time and react quickly to affected events and processes. By effectively eliminating data quality problems with our data quality tools and creating a centralised view of their data, banks can improve their measurement, monitoring and management of credit, market, operational and liquidity risks. They also have the certainty of addressee-correct preparation with simultaneous acquisition of all important information necessary for risk reporting acc. to BCBS 239. Thanks to Uniserv Smart Customer MDM, banks are in a position to strengthen their existing customer relationships, and with high quality customer master data, to successfully implement campaigns for acquiring new customers. GROUP SUBSIDIARY 1 CONSOLIDATED VIEW OF CUSTOMER DATA SUBSIDIARY 2 - Complete bank control - Risk Data Warehouse - Finance Data Warehouse Generation of a group partner ID in the data quality process with Uniserv Smart Customer MDM 5

6 CUSTOMER DATA MANAGEMENT from the European market leader Uniserv is the European expert for successful customer data management. Smart Customer MDM, the MDM solution for customer master data, unites high quality data and data integration to a holistic approach. Customer data stands in the central focus of our initiatives for data quality, data migration, data warehousing, as well as master data management, e.g. in the field of CRM applications, ebusiness, direct & database marketing, CDI / MDM applications and business intelligence. With several thousand installations worldwide, Uniserv fulfils the expectations for a holistic solution for all business and customer data throughout its entire data life cycle. At its headquarters in Pforzheim, Germany, as well as in its branches in Paris and Amsterdam, Uniserv employs more than 130 persons and includes numerous cross-branch and internationally renowned companies such as AkzoNobel, Allianz, Deutsche Bank, Deutsche Pfandbriefbank, DZ Bank, ebay, EDEKA, France Telecom, KfW Banking Group, Lufthansa, Siemens, Springer Science & Business Media, Time Warner, as well as TUI and Volkswagen, amongst its customers. UNISERV GmbH UNISERV GmbH Rastatter Str. 13, Pforzheim, Rastatter Deutschland Str. 13, Pforzheim, Germany T: T: F: F: E: info@uniserv.com E: info@uniserv.com Uniserv GmbH, Pforzheim, All rights Uniserv reserved GmbH, Pforzheim, All rights reserved