IBM Banking: Automated Systems help meet new Compliance Requirements
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IBM Banking: Automated Systems help meet new Compliance Requirements

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IBM automation systems, such as e-discovery and auto-classification, help financial firms achieve transparency and meet compliance requirements while maximizing the value of your existing content ...

IBM automation systems, such as e-discovery and auto-classification, help financial firms achieve transparency and meet compliance requirements while maximizing the value of your existing content management architecture.

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IBM Banking: Automated Systems help meet new Compliance Requirements IBM Banking: Automated Systems help meet new Compliance Requirements Presentation Transcript

  • The New Compliance Mandate:  Enterprise‐Wide Transparency A Financial Technology Network  Webcast Sponsored by: 
  • Today’s Panelists Greg MacSweeney Rodney Nelsestuen Editor-in-Chief, Senior Research Director Wall Street & Technology Financial Strategies & IT Investments Tower Group (RiskTech Blogger) Gary Rylander Damian Trzebunia Associate Partner Enterprise Content Management IBM Global Business Services Compliance Product Marketing Risk & Compliance Practice IBM Information Management Software (RiskTech Blogger)
  • Financial Services IBM’s Integrated Risk Management offerings and capabilities are organized around a holistic view of risk Integrated Risk Management Financial Financial Operational & Governance & Risk Crimes IT Risk Compliance Risk Area Industry Requirement Understand market and credit risk exposure across multiple silos to make  Financial Risk financial and risk decisions consistent with business objectives Secure all transactions and forms of interaction, proactively prevent  Financial Crimes increasingly sophisticated internal and external prohibited activities and  effectively manage detected events Operational & Proactively manage potential risks, both internal and external, business and  IT Risk IT, resulting from events impacting operations, processes and applications Understand and manage compliance across a dynamic set of voluntary and  Governance &  mandatory requirements imposed by multiple regulatory bodies, across  Compliance operating jurisdictions, at an optimal cost for value
  • TowerGroup – Opening Comments Regulation of electronic content complicates the IT  architecture New demands for visibility and transparency in  financial services have the benefit of delivering business  value On‐demand intelligence will have a growing role in  holistic risk management Electronification of business processes brings new  demands to the IT group and redesigns business flows Source: TowerGroup
  • Financial Services Is this transparent? • >50% over  retention • >75% unclassified  or misclassified • >20:1 duplication ...
  • Financial Services The Information Lifecycle Frequency of Access and Use Born Digital Expiration Over 90% of information is Roughly 95% has a born digital … and the rest retention policy … very little should become digital should be kept forever 85% of enterprise information is unstructured Time
  • Basics of regulatory content management –E-discovery refers to any process in which electronically stored information (ESI) is sought out, secured, and searched for use in civil or criminal legal cases. –By year end 2008, 28 states had or were planning e-discovery provisions in their general civil procedure codes or modified specialized rules for business courts –Data classification is the categorization of data, an approach to storing computer data •Data can be classified according to its value to the business or how often it needs to be accessed •Goal is to optimize the use of storage for many purposes: economic, technical, legal, and administrative
  • E‐discovery regulation brings new architectural  and process issues to financial services Diagram Source: EDRM (edrm.net)
  • Financial Services The proposed regulatory framework increases the importance of transparency, operational risk management and the underlying dependency on records and systems management 1. If its securitized or traded, it will require transparent, dynamic record keeping throughout its lifecycle 2. If its reported, be prepared to report it with XBRL tags 3. If its an operational risk, be prepared to do quantitative risk reporting 4. If you are a Tier 1 FHC, expect more scrutiny 5. Harmonization among agencies and international bodies will result in less variability among regulatory regimes 6. Greater reliance on prudential instead of rules based regimes will increase the value of being able to prove http://graphics8.nytimes.com/packages/images/nytint/doc effective operational risk management s/obama-s-plan-for-financial-regulatory- reform/original.pdf
  • Business value of electronic content  management in action Connect with core processing, loan origination, or  lending systems to complete transaction Obtain Approval,  Index,  Create Digitize Communicate  Authenticate, and  Execute  Archive,  Document Document and Distribute Authorize Transaction  and Store User Roles, Business Rules  Regulatory Requirements and Audit Trail  Disaster Recovery Source: TowerGroup
  • Financial Services Technology is your friend in attaining transparency • Automated Classification – Data – Content • Deduplication • XBRL beyond reporting – Automated XBRL Classification  of • Documents • Process Definition linked to  XBRL taxonomy • Automated monitoring & audit
  • Financial Services Agile Enterprise Content Management IBM agile ECM helps companies make better decisions faster by: ● Managing all forms of content ● Delivering content intelligence ● Optimizing associated business processes ● Enabling compliance through an integrated information infrastructure Unified platform for content, process, discovery and compliance
  • Financial Services Agile Enterprise Content Management Delivers  Compliant Information Management Frequency of Access and Use A Standard Model for Paper, Data and Content Time
  • Financial Services Enterprise Compliance is Invisible to Line-of-Business Active Governance (GRC) Security policies, controls and risks are enforced, tested, monitored, audited and reported “in-process” Records automatically retained and Classified Content / E-mail is collected, Proactive eDiscovery enhanced and managed in context Search and Analytics with Content Collection and are enabled Advanced Classification ECM Platform
  • Financial Services The business case for transparency Key Benefit buckets Insurance Savings Process Savings Infrastructure Savings Records Litigation Management Support & Compliance Labor ts Be nef i
  • Case Study: A national bank develops e-discovery capability – Current state – $75 billion dollar asset regional US bank operating under a national charter in 10 states.  – No formal policy to delete or otherwise reduce the amount of data held across the  institution. Some kept, some discarded, no discipline.  – No metadata or tagging process to identify data and its value – Email archiving done via an automated tool but no classification system – A data warehouse exists which is under separate governance and policy must address  all data in the institution that is kept in the enterprise data warehouse. – Coordination with governance resources over the data warehouse is recognized as a  fundamental need.  – While bank has not outsourced significant business processes, it is evaluating several  BPO/ITO options. Policy should provide for this potential • Include unstructured electronic data including credit files, loan documents, legal documents  and vendor contracts  • Back up vendor has all servers in a storage area network (SAN) – need to extend policy to  vendor.
  • Case study: a national bank’s compliance with e-discovery policy – Developed an e‐discovery policy with a process and IT roadmap – Prior to policy setting, the bank established a means to decide its  retention goals • The value of information to the bank – with a classification  system  • Risk assessment of keeping information of different types – with amelioration strategies E‐discovery policy must coordinate with policies on physical assets  as well as electronic assets – but won’t day one.
  • Financial Services Outsourcing can be another ally • Make it someone else’s  responsibility too • Make your KPI’s their SLA’s • Reduce your costs • Leverage community  “learning” and assets – Best practices – Someone else’s SAS 70 – Analytics as a Service trained  on a global sample
  • Financial Services ROI of Compliant Information Management Automate Enforce records decisions, clean retention to reduce up legacy data – save up to 17 2 3 eDiscovery and storage costs by cents per 50-80% document Leveraging a common infrastructure accelerates cost 4 1 reduction Control Growth, Optimize remove duplicate eDiscovery data – reduce decisions to storage costs by reduce costs by 50%-80% up to 80%
  • Financial Services The No Paper Weight Program Save money. Risk less. Know more. Go green. • IBM Assessment Expertise – New:  Free No Paper Weight ½ Day Checkup at no obligation • Register here:   https://www.informationmanagementrequest.com/mk/g et/npw0509rp – In‐depth No Paper Weight Prescriptive Assessments now  available from the IBM Centre of Excellence for Compliant  Information Management • IBM Solutions – Agile ECM solutions for Content, Process, Compliance and  Discovery – Information Infrastructure solutions
  • Financial Services Get Connected with IBM and our Risk Community Websites enabling you to engage with our Subject Matter Experts IBM Offerings & Capabilities Educational Videos, White Papers and Blogs http://www.ibm.com/banking/risk by Risk Subject Matter Experts http://www.risktech.financetech.com Social Network Groups for Financial Services where risk isn’t the only topic http://www.linkedin.com/groups?gid=1946782 http://www.linkedin.com/groups?gid=1894930
  • Q&A please submit your question now
  • Resources  To View This or Other Events On‐Demand Please Visit: http://www.techweb.com/webcasts For more information on this topic please visit: IBM Offerings & Capabilities RiskTech for Educational Videos, White Papers http://www.ibm.com/banking/risk and Blogs by Risk Subject Matter Experts http://www.risktech.financetech.com Social Network Groups for Financial Services where risk isn’t the only topic http://www.linkedin.com/groups?gid=1946782 http://www.linkedin.com/groups?gid=1894930