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JWG and Top-Tier Financial Institutions Collaborate to Launch Industry Guidance on Customer Data

JWG and Top-Tier Financial Institutions Collaborate to Launch Industry Guidance on Customer Data

Industry guidance on the ‘Maintenance of wholesale customer data’ details seven recommendations which could save industry £1 billion

London – 15 February 2010.  Following over 400 days of collaboration from top-tier banks and their trade associations, JWG, the think-tank that makes sense of FS regulations, has today published industry guidance for the ‘Maintenance of wholesale customer data’.  The guidance has been developed by JWG’s Customer Data Management Group (CDMG) and details the issues, including reference processing and data modelling, faced by thousands of firms which all need to comply with 1,000 pages of FS regulation on to the treatment of customer data.  The guidance, which includes seven recommendations, could save the industry £1 billion through increased efficiency over the next five years. 

There is no detailed regulation of what specific customer data maintenance is required per se, but successive waves of regulation over the past two decades have created an holistic set of requirements.  Taken in aggregate, this mix of regulatory principles and prescriptive standards creates a patchwork of customer data information requirements which spells out the service levels required across many different functions within the firm - front-offices, operations, compliance, legal, risk, audit and senior management all have roles to play. 

The CDMG has developed the recommendations in this guidance to help the firms define the impact of new requirements and provide management frameworks to deal with them.  CDMG’s work to date has so far considered the relevant rules introduced up to the end of 2008 and the guidance will be extended to cover 2009 and 2010 requirements. 

The CDMG was originally formed in response to feedback from 300 participants at JWG’s 2008 FORUMS, who identified customer data as a top industry priority.  The special interest group includes member firms of the Futures and Options Association (FOA) and the Association for Financial Markets in Europe (AFME) as well as top technology and data supply chain members.

Julia Sutton, Director - Global Reference Data at Royal Bank of Canada, comments: “This is not just another regulatory document, this guidance will help senior managers - in the firms, their regulators and the supply chain - understand the issues surrounding customer data and benchmark their practices.  We are pleased that the trade associations and the FSA recognise the importance of establishing what good practices look like in this fast moving area.”

Bob Bishop, Head of Client Data Management, RBS Global Banking & Markets, adds: “Many will assume that this is purely an IT issue, however, this guidance is relevant to all who manage the many functions affected by regulations.  Getting customer data right is of utmost importance across all facets of a bank.  We are taking this effort seriously as it is not only fundamental to our management of risk and costs but also forms the foundation of good customer experience.”

PJ Di Giammarino, CEO of JWG, concludes: “The definition of ‘what good customer information looks like’ is fundamental to getting the supervision of the financial sector right.  It’s great to see industry practitioners working together proactively to write a data rulebook.  It’s now up to the supply chain to apply the right technologies and tools to deliver workable solutions quickly and effectively.  We look forward to helping to lead the discussion about what types of solutions are needed in this complex space.”

The recommendations within the guidance have been defined to help firms cope with the impact of new regulatory requirements and provide frameworks to deal with them. The recommendations include:

  1. Policy creation.  Firms should create an internal policy for maintaining wholesale customer data that is aligned with existing control policies (the ‘maintenance policy’)
  2. Governance and metrics.  The maintenance policy should outline the operating model controls for selecting and managing the customer data set
  3. Regulation-based data set.  Customer data sets should be defined in the maintenance policy and linked to regulations and legal requirements
  4. Risk-based categorisationCustomer data sets should be categorised and prioritised based on the nature, scale and complexity of the activities of the financial institution
  5. Review criteria.  The maintenance policy should define criteria, frequency and rigour for periodic reviews aligned with risk-based customer data categorisation of recommendation 4
  6. Triggered updates.  The maintenance policy should outline the events that impact the regulation-based customer data set defined in recommendation 3
  7. Evaluating sources.  The maintenance policy should outline the minimum performance, quality and service level standards required to approve customer data sources as ‘fit for purpose’.

To download the industry guidance on the ‘Maintenance of wholesale customer data’, please visit more information on the CDMG click here.

About JWG: JWG seeks to be recognised by regulators, financial institutions and technology firms as the independent analysts to help determine how the right regulations can be implemented in the right way.  JWG is unique.  Its status as an independent think-tank permits collaboration with regulatory and industry bodies, financial institutions and technology firms without serving the interests of any constituent over another.

For further information please contact:

PJ Di Giammarino: +44 (0) 7811 430 503

Louisa Excell: (0) 20 7608 8350

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