Data quality in banking: Regulatory requirements and best practices
Abstract
Since the beginning of the financial crisis in 2007, the quality of risk data has become a subject of concern for risk managers in banks and other financial institutions. In order to tackle this subject a four-step analysis is proposed. First, the issues associated with risk data quality in the banking sector are examined, the main one being the silo organisation of risk data. Secondly, the paper reviews the existing data quality regulations in the financial sector, summarising briefly the requirements in Basel II and in Solvency II (the first regulation that provided formal requirements for data quality). Thirdly, a best practice proposal is made for banks in a centralised approach to risk data, involving the integration of risk and finance data. Finally, the centralised data approach is combined with a sensitivity technique in order to obtain more effective data quality strategies and indicators.
The full article is available to subscribers to the journal.
Author's Biography
Michele Bonollo is Head of the IT Risk Management Department at Banco Popolare, that develops software systems for the Pillar I and Pillar II risks, and many systems for control and data quality processes. He holds a PhD in statistics from the University of Padova and became the Professor of Computational Finance there in 2004. Michele has published several papers in academic and professional journals.
Massimiliano Neri is an Associate Director in Moody’s Analytics, and covers the role of specialist in best practices for enterprise risk management solutions. He holds a PhD in applied economics from the Universidad Rey Juan Carlos in Madrid where he conducts post-doctoral research. Massimiliano is also a visiting professor of risk management at the Centre for Advanced Studies, OMMA, Madrid.
Citation
Bonollo, Michele and Neri, Massimiliano (2012, March 1). Data quality in banking: Regulatory requirements and best practices. In the Journal of Risk Management in Financial Institutions, Volume 5, Issue 2. https://doi.org/10.69554/MHHF7098.
Publications LLP