Alignment: Office of the Chief Data Officer & BCBS 239. Alignment overview between OCDO framework and Principles for Effective Risk Data Aggregation and Risk Reporting.

1. @CraigMilroy 09-2014
Alignment:
Office of the Chief Data Officer & BCBS 239
Craig C. Milroy, Chief Data Architect

2. @CraigMilroy 09-2014
When did Banking Become So Complicated?
Increased data centricity

3. @CraigMilroy 09-2014
Financial Services Example
2008
2009
2010
2011
2012
2013
2014
Increased Regulatory and Customer Demands
Dodd Frank
SEC Proxy
Disclosures
Basel III
FATCA
Lehman
Brothers
#BIG DATA
#OPEN DATA
#INTERNET OF THINGS
BCBS 239
2016 Implementation

4. @CraigMilroy 09-2014

5. @CraigMilroy 09-2014
OFFICE OF THE CHIEF DATA OFFICER

6. @CraigMilroy 09-2014
Office of the CDO - Overview
Chief Information Officer
VP Information Management
Director Data Management
Database Administrator
Data Architect
Chief Data Officer Chief Analytics Officer Data Scientist Information Architect
Chief Customer Officer
Chief Marketing Officer
Chief Risk Officer
… shift data from a project to enterprise
centric point of view…

7. @CraigMilroy 09-2014
What Would A CDO Mandate Look Like?
Customer Growth
Growth
Speed
Customer
Innovation
Operational
Risk Reduction
Financial
Efficiency
Risk Exposure
Regulatory
Controls
Responsiveness
… Measure and manage data risk : Enable capabilities to measure, predict risk, and influence enterprise risk appetite…

8. @CraigMilroy 09-2014
CDO Organizational Journey
"Cloud Cover"
CEO
CDO
CIO
CRO/CxO
CEO
CDO
CIO
CRO/CxO
"Value Realized"
CEO
CDO
CIO
CRO/CxO
"Organizationally Focused"
CDO
LOB

9. @CraigMilroy 09-2014
Office of the CDO – Straw man
CIO
CRO/CxO/LOB
Board
CDO
Governance
Strategy
Innovation
Enablement
Science/Analytics
Communication
Policy
Quality
Model
Master
Reference
Clients
Channels
Business Capabilities
Business Processes
Data Foundation
External

10. @CraigMilroy 09-2014
Core OCDO Components
… OCDO needs to consider with an enterprise lens
all business technology priorities and has the ability to support Enterprise Regulatory demands…
Regulatory
Customer
Innovation
Security & Privacy
Info. Lifecycle Management
Architecture
Master Data Management
Governance
Database Management
DB
Integration
Analytics & BI
Metadata
Management
Reference
Quality
Services

11. @CraigMilroy 09-2014

12. @CraigMilroy 09-2014
BCBS 239 BASEL COMMITTEE ON BANKING SUPERVISION

13. @CraigMilroy 09-2014
Governance
Architecture
Infrastructure
Accuracy
Integrity
Completeness
Timeliness
Adaptability
Accuracy
Clarity
Usefulness
Comprehensive
Frequency
Distribution
BCBS 239 Key Principles

14. @CraigMilroy 09-2014
Principles for Effective Risk Data Aggregation and Risk Reporting
One of the most significant lessons learned from the global financial crisis that began in 2007 was that banks’ information technology (IT) and data architectures were inadequate to support the broad management of financial risks.
Many banks lacked the ability to aggregate risk exposures and identify concentrations quickly and accurately at the bank group level, across business lines and between legal entities.
Some banks were unable to manage their risks properly because of weak risk data aggregation capabilities and risk reporting practices.
This had severe consequences to the banks themselves and to the stability of the financial system as a whole.
Bank for International Settlements January 2013

15. @CraigMilroy 09-2014
Principles for Effective Risk Data Aggregation and Risk Reporting
High Standard
•
BCBS 239 set a high standard for risk data aggregation and reporting.
•
Challenging timeline for implementation.
•
BCBS 239 raises the standard for risk data quality.
Enterprise Lens
The BCBS 239 Principles for Risk data can be applied to their other data domains with any organization.
The BCBS 239 Principles are the best practices for data that we should have previously implemented but continually ignored.

16. @CraigMilroy 09-2014
Principles for Effective Risk Data Aggregation and Risk Reporting
… Many in the banking industry recognize the benefits of improving their risk data aggregation capabilities….
…This leads to gains in efficiency, reduced probability of losses and enhanced strategic decision-making, and ultimately increased profitability…
Bank for International Settlements January 2013

17. @CraigMilroy 09-2014
Principles for Effective Risk Data Aggregation and Risk Reporting
Enhance the infrastructure for reporting key information, to identify, monitor and manage risks;
Improve the decision- making process throughout the banking organization;
Enhance the management of information across legal entities
Reduce the probability and severity of losses resulting from risk management weaknesses;
The Principles are expected to support a bank’s efforts to:
Improve the speed at which information is available and hence decisions can be made
Improve the quality of strategic planning and the ability to manage the risk of new products and services.
Bank for International Settlements January 2013

18. @CraigMilroy 09-2014
Overarching Governance and Infrastructure
A bank should have in place a strong governance framework, risk data architecture and IT infrastructure.
Bank for International Settlements January 2013
Regulatory
Customer
Innovation
Security & Privacy
Info. Lifecycle Management
Architecture
Master Data Management
Governance
Database Management
DB
Integration
Analytics & BI
Metadata
Management
Reference
Quality
Services
Principle 1: Governance
Principle 2: Data architecture and IT infrastructure

19. @CraigMilroy 09-2014
Risk Data Aggregation Capabilities
Banks should develop and maintain strong risk data aggregation capabilities to ensure that risk management reports reflect the risks in a reliable way.
Bank for International Settlements January 2013
Regulatory
Customer
Innovation
Security & Privacy
Info. Lifecycle Management
Architecture
Master Data Management
Governance
Database Management
DB
Integration
Analytics & BI
Metadata
Management
Reference
Quality
Services
Principle 3: Accuracy and Integrity
Principle 4: Completeness
Principle 5: Timeliness
Principle 6: Adaptability

20. @CraigMilroy 09-2014
Risk Reporting Practices
Accurate, complete and timely data is a foundation for effective risk management.
Banks should develop forward looking reporting capabilities to provide early warnings of any potential breaches of risk limits that may exceed the bank’s risk tolerance/appetite.
Bank for International Settlements January 2013
Regulatory
Customer
Innovation
Security & Privacy
Info. Lifecycle Management
Architecture
Master Data Management
Governance
Database Management
DB
Integration
Analytics & BI
Metadata
Management
Reference
Quality
Services
Principle 7: Accuracy
Principle 8: Comprehensiveness
Principle 9: Clarity and usefulness
Principle 10: Frequency
Principle 11: Distribution

21. @CraigMilroy 09-2014
Risk Reporting Practices
These risk reporting capabilities should also allow banks to conduct a flexible and effective stress testing which is capable of providing forward-looking risk assessments.
Bank for International Settlements January 2013
Regulatory
Customer
Innovation
Security & Privacy
Info. Lifecycle Management
Architecture
Master Data Management
Governance
Database Management
DB
Integration
Analytics & BI
Metadata
Management
Reference
Quality
Services
Principle 7: Accuracy
Principle 8: Comprehensiveness
Principle 9: Clarity and usefulness
Principle 10: Frequency
Principle 11: Distribution

22. @CraigMilroy 09-2014

23. @CraigMilroy 09-2014
Banking, Big Data, Business Analytics, Business Architecture, Business Capability, Business Intelligence, Business Leadership Business Process, Business Transformation, Chief Data Architect, Cloud, Customer Centricity, Customer Relationship Management , Data Architecture , Data Assessments, Data Exploration, Data Governance, Data Integration, Data Process Modeling, Data Quality, Data Strategy, Data Streams, Data Visualization, Data Warehouse, Design, Financial Services, Enterprise Architecture, FSLDM, Hadoop, Information Lifecycle Management, Investment, Master Data Management, Metadata Management, Mobile, Next Generation Data Platform, Open Data, Open Source, Reference Data Management, Roadmap, Risk Management, Startup, Technology Stack, Thought Leadership
craigmilroy
ca.linkedin.com/in/craigcmilroy