ING Lease  <ul><li>The relationship between Risk and Compliance and Data Quality </li></ul><ul><li>Owen Francis, Director,...
ING Lease <ul><li>ING Lease  is among the top 5 of major leasing companies in Europe  </li></ul><ul><li>ING Lease  is part...
ING General Lease: European footprint 2007 ING Lease UK ING Lease Poland ING Lease Germany Moscow Paris Milan Warsaw Bucha...
Where we started <ul><li>ING Lease (UK)  established in 1989 in Cheapside, London </li></ul><ul><li>Subsequently, acquired...
How our business looks <ul><li>ING Lease UK  employs 320 people </li></ul><ul><li>We aim to process daily volumes of: </li...
What we do <ul><li>Lend to UK businesses to buy a wide variety of assets  </li></ul><ul><li>Operate through intermediaries...
What we finance <ul><li>Industrial assets </li></ul><ul><ul><li>Packaging, print, processing, manufacturing, engineering, ...
Data Quality Ownership <ul><li>Ownership for data quality must reside with the Business </li></ul><ul><li>Essential that d...
ORGANISATIONAL EXECUTIVE COMMITTEE STRUCTURE Managing for Value Meeting  Enhancements Meeting  Operational Risk Forum  Aut...
ORGANISATIONAL EXECUTIVE COMMITTEE STRUCTURE The red shading indicates the committees where data quality is discussed. Man...
Data Quality Management  <ul><li>ING Group mission statement: </li></ul><ul><ul><li>To structurally improve the creation a...
Data Quality Management  <ul><li>Approach -  </li></ul><ul><ul><li>Technical Data Quality: data quality issues can be solv...
Data Quality Management  <ul><li>Technical Data Quality:  </li></ul><ul><ul><li>Coverage of data in centralised global dat...
Data Quality Management  <ul><li>Processes and Procedures: </li></ul><ul><ul><li>Define the workflows </li></ul></ul><ul><...
Data Quality Management  <ul><li>Clean up of current data </li></ul><ul><ul><li>First priority: completeness and correctne...
Risks of Incorrect data Basel II Risk Components PD LGD EAD Maturity Credit Scoring/Acceptance Loan Pricing Regulatory Cap...
Risks of Incorrect data  <ul><li>Importance of complete and correct Data </li></ul><ul><ul><li>Provisions  </li></ul></ul>...
Risks of Incorrect data <ul><li>Data Problems are caused by </li></ul><ul><ul><li>Duplicate data entry </li></ul></ul><ul>...
Data Quality Culture Policy Regulatory Process Data Quality Basel II/ Solvency II Workflow management Country Risk Sarbane...
Data Quality Culture <ul><li>DATA COMPLETENESS : </li></ul><ul><ul><li>All the input fields are populated </li></ul></ul><...
Data Quality Culture <ul><li>Single integrated (business) environment </li></ul><ul><ul><li>One global customer database  ...
Recommendations <ul><li>Establish Steering Committee to oversee progress </li></ul><ul><li>Data Management Chapter in the ...
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Ing Lease Uk - The relationship between Risk & Compliance and Data Quality - Data Quality Summit 2008

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  • Ing Lease Uk - The relationship between Risk & Compliance and Data Quality - Data Quality Summit 2008

    1. 1. ING Lease <ul><li>The relationship between Risk and Compliance and Data Quality </li></ul><ul><li>Owen Francis, Director, Risk and Compliance </li></ul><ul><li>David Fabia, Senior Manager, Compliance </li></ul>
    2. 2. ING Lease <ul><li>ING Lease is among the top 5 of major leasing companies in Europe </li></ul><ul><li>ING Lease is part of ING Wholesale Banking </li></ul><ul><li>ING Lease has a presence in 15 countries: </li></ul><ul><ul><li>Netherlands </li></ul></ul><ul><ul><li>United Kingdom </li></ul></ul><ul><ul><li>Belgium </li></ul></ul><ul><ul><li>Luxembourg </li></ul></ul><ul><ul><li>France </li></ul></ul><ul><ul><li>Spain </li></ul></ul><ul><ul><li>Italy </li></ul></ul><ul><ul><li>Germany </li></ul></ul><ul><ul><li>Russia </li></ul></ul><ul><ul><li>Poland </li></ul></ul><ul><ul><li>Czech Republic / Slovakia </li></ul></ul><ul><ul><li>Hungary </li></ul></ul><ul><ul><li>Romania </li></ul></ul><ul><ul><li>Ukraine </li></ul></ul>
    3. 3. ING General Lease: European footprint 2007 ING Lease UK ING Lease Poland ING Lease Germany Moscow Paris Milan Warsaw Bucharest Budapest Brussels Amsterdam Prague Hamburg London Madrid Luxembourg Kiev ING Lease France ING Lease Spain ING Lease Italy ING Lease Eurasia ING Lease Romania ING Lease Ukraine ING Lease Luxembourg ING Lease Belgium ING Lease Netherlands ING Lease Hungary ING Lease Czech Republic / Slovakia
    4. 4. Where we started <ul><li>ING Lease (UK) established in 1989 in Cheapside, London </li></ul><ul><li>Subsequently, acquired three businesses from Abbey in June 2004 </li></ul><ul><ul><li>Asset Finance (based in Redhill) </li></ul></ul><ul><ul><li>Vendor Finance (based in Enfield) </li></ul></ul><ul><ul><li>Country Finance (based in Harrow) </li></ul></ul><ul><li>Four offices consolidated into one central office in Redhill in June 2005 </li></ul>
    5. 5. How our business looks <ul><li>ING Lease UK employs 320 people </li></ul><ul><li>We aim to process daily volumes of: </li></ul><ul><ul><li>400 plus proposals (processed within 2-4 hours) </li></ul></ul><ul><ul><li>Pay out 200 plus agreements the same day </li></ul></ul><ul><ul><li>Provide 200 plus settlement quotes </li></ul></ul><ul><ul><li>At any one time we have 2000 cases in default (over 31 days) </li></ul></ul><ul><ul><li>Overall portfolio consists of 100,000 plus customers </li></ul></ul>
    6. 6. What we do <ul><li>Lend to UK businesses to buy a wide variety of assets </li></ul><ul><li>Operate through intermediaries – vendors, dealers, brokers </li></ul><ul><li>Operate in a number of market segments: </li></ul><ul><li>Small Ticket </li></ul><ul><li>- Vendor – point of sale finance for business equipment </li></ul><ul><li>- General Asset </li></ul><ul><li>- Agriculture </li></ul><ul><li>Middle Ticket </li></ul><ul><li>- Financial Products (Middle Ticket transactions) </li></ul><ul><li>- Block Discounting </li></ul><ul><li>Commercial Mortgages (early 2008) </li></ul>
    7. 7. What we finance <ul><li>Industrial assets </li></ul><ul><ul><li>Packaging, print, processing, manufacturing, engineering, construction </li></ul></ul><ul><li>Transportation assets </li></ul><ul><ul><li>Cars, commercial vehicles, buses, coaches, materials handling, rail and shipping </li></ul></ul><ul><li>Business equipment </li></ul><ul><ul><li>IT, telecoms, reprographics, audio-visual, security, vending </li></ul></ul><ul><li>Agricultural equipment </li></ul><ul><ul><li>Farm machinery, turf care </li></ul></ul>
    8. 8. Data Quality Ownership <ul><li>Ownership for data quality must reside with the Business </li></ul><ul><li>Essential that data quality forms an integral part of Operational Risk Management </li></ul><ul><li>Establish a Executive Committee structure </li></ul><ul><li>Ensure that CEO and Senior Management are fully engaged </li></ul><ul><li>Create a set of portfolio reports to firmly embed data quality into the Business </li></ul><ul><li>Compliance function to oversee progress and report on targets achievement </li></ul>
    9. 9. ORGANISATIONAL EXECUTIVE COMMITTEE STRUCTURE Managing for Value Meeting Enhancements Meeting Operational Risk Forum Automated Underwriting Steering Committee Middle Ticket Residual Value Strategy Meeting Channels User Group Complaints Meeting Board Meeting Risk Committee Management Meeting Credit Forum Operational Review Meeting Operational Risk Committee
    10. 10. ORGANISATIONAL EXECUTIVE COMMITTEE STRUCTURE The red shading indicates the committees where data quality is discussed. Managing for Value Meeting Enhancements Meeting Operational Risk Forum Automated Underwriting Steering Committee Middle Ticket Residual Value Strategy Meeting Channels User Group Complaints Meeting Board Meeting Risk Committee Management Meeting Credit Forum Operational Review Meeting Operational Risk Committee
    11. 11. Data Quality Management <ul><li>ING Group mission statement: </li></ul><ul><ul><li>To structurally improve the creation and maintenance of credit risk related data (customers, facilities, outstandings, covers, provisions, repayment schedules) at all levels of ING Bank and in all relevant systems in order to create efficient, consistent and transparent credit risk reporting which is used for decision making purposes both internally and externally </li></ul></ul>
    12. 12. Data Quality Management <ul><li>Approach - </li></ul><ul><ul><li>Technical Data Quality: data quality issues can be solved by technical checks in the systems </li></ul></ul><ul><ul><li>Processes and Procedures: the discipline to follow good processes and procedures creates a work environment where the first input is directly the right one </li></ul></ul><ul><ul><li>Clean up of current data </li></ul></ul>
    13. 13. Data Quality Management <ul><li>Technical Data Quality: </li></ul><ul><ul><li>Coverage of data in centralised global database > 99% </li></ul></ul><ul><ul><li>Reliability of data: number of errors < 0.5% </li></ul></ul><ul><ul><li>Rating model compliance: Basel II compliant-ratings > 99% </li></ul></ul><ul><ul><li>Reconciliation between local systems and global database = 100% </li></ul></ul>
    14. 14. Data Quality Management <ul><li>Processes and Procedures: </li></ul><ul><ul><li>Define the workflows </li></ul></ul><ul><ul><li>Agree consistent data definitions </li></ul></ul><ul><ul><li>Agree data entry processes and procedures </li></ul></ul><ul><ul><li>Set clear job descriptions </li></ul></ul><ul><ul><li>Ensure that defined processes and procedures are followed </li></ul></ul><ul><ul><li>Set standards and measure data quality against those standards </li></ul></ul><ul><ul><li>Continually review and improve processes and procedures </li></ul></ul>
    15. 15. Data Quality Management <ul><li>Clean up of current data </li></ul><ul><ul><li>First priority: completeness and correctness of </li></ul></ul><ul><ul><ul><li>PD, eg, industry code </li></ul></ul></ul><ul><ul><ul><li>LGD, eg, asset code </li></ul></ul></ul><ul><ul><ul><li>Exposure / Limit </li></ul></ul></ul><ul><ul><ul><li>Covers / Guarantees </li></ul></ul></ul><ul><ul><ul><li>De-duplications </li></ul></ul></ul>
    16. 16. Risks of Incorrect data Basel II Risk Components PD LGD EAD Maturity Credit Scoring/Acceptance Loan Pricing Regulatory Capital/RWA Performance measurement Loan Loss Provisioning Economic Capital
    17. 17. Risks of Incorrect data <ul><li>Importance of complete and correct Data </li></ul><ul><ul><li>Provisions </li></ul></ul><ul><ul><li>Basel 2 – PD/LGD </li></ul></ul><ul><ul><li>Credit ratings </li></ul></ul><ul><ul><li>Internal reporting </li></ul></ul><ul><ul><li>Portfolio management </li></ul></ul><ul><ul><li>Strategic decisions </li></ul></ul><ul><li>Group-wide initiative to structurally improve the quality of data </li></ul>
    18. 18. Risks of Incorrect data <ul><li>Data Problems are caused by </li></ul><ul><ul><li>Duplicate data entry </li></ul></ul><ul><ul><li>Incorrect data entry </li></ul></ul><ul><ul><li>No data owner (accountable) </li></ul></ul><ul><ul><li>Indistinct data definitions (talking the same language) </li></ul></ul><ul><ul><li>Faulty paper forms / dossiers </li></ul></ul><ul><ul><li>Lack of Reconciliation and Validation </li></ul></ul>
    19. 19. Data Quality Culture Policy Regulatory Process Data Quality Basel II/ Solvency II Workflow management Country Risk Sarbanes-Oxley Loan Loss Provisioning Straight-through processing First time right One time data entry Ownership/ Authorisation Standardised Process Definitions/ Standards Economic Capital IFRS Expected Loss Customer Profitability
    20. 20. Data Quality Culture <ul><li>DATA COMPLETENESS : </li></ul><ul><ul><li>All the input fields are populated </li></ul></ul><ul><li>DATA CORRECTNESS </li></ul><ul><ul><li>Correct limit and/or product types </li></ul></ul><ul><ul><li>Correct ratings entered </li></ul></ul><ul><ul><li>Covers delivered and entered correctly </li></ul></ul><ul><ul><li>Correct asset code </li></ul></ul><ul><ul><li>Global Database information correct </li></ul></ul>
    21. 21. Data Quality Culture <ul><li>Single integrated (business) environment </li></ul><ul><ul><li>One global customer database </li></ul></ul><ul><ul><li>One credit risk process tool </li></ul></ul><ul><ul><li>One consolidated risk data warehouse </li></ul></ul><ul><ul><li>One credit risk engine and reporting tool </li></ul></ul><ul><li>One time data entry </li></ul><ul><ul><li>Each data element should be input once, in the most logical place </li></ul></ul><ul><ul><li>This helps to improve data quality and consistency </li></ul></ul><ul><ul><li>Lower operational risk </li></ul></ul>
    22. 22. Recommendations <ul><li>Establish Steering Committee to oversee progress </li></ul><ul><li>Data Management Chapter in the Credit Policy </li></ul><ul><li>Data Quality is an issue in </li></ul><ul><ul><li>Business Unit visits </li></ul></ul><ul><ul><li>Audit reports </li></ul></ul><ul><ul><li>Credit Inspection reports </li></ul></ul><ul><li>General awareness of the importance of Data Quality throughout the whole Business Unit is of paramount importance </li></ul><ul><li>Increasingly businesses are being judged on data quality </li></ul>
    23. 23. Questions?

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