Articles by Julian Naylor
We are delighted to be welcoming our Marketing Executive, Emma McMahon, into the Marketing Department at Kinaesis. Emma is joining to work on our Marketing, Communications and Digital Strategies.
Emma brings extensive experience in both traditional and digital marketing to the organisation. She has worked almost exclusively in Marketing during her career so brings a range of fresh new ideas to the company. Welcome Emma.
As January 2018 looms heavy on the horizon, the investment community from the smallest IFA to the largest Fund Manager and every platform in between is trying to ensure that they are MiFID II compliant. The changes to their operating model are significant and wide ranging. Remember this is against the backdrop of another significant regulation, GDPR, which has to be in place by May 2018.
So is it boom time for business analysts, developers and testers as more requirements are identified, developed, tested and implemented?
Well yes and no.
There are certainly some requirements which will need functional changes to IT systems and the ability to capture additional data. However, more importantly do you have this data? Operationally how are you going to get collect it? You could capture it at “point of sale” but this would be onerous, require significant IT changes and could cause a transaction to fail. Additionally, what about ongoing monitoring and if you provide online information for investors, how are you going to ensure that they’ve seen it, as an example?
This brings us back to the original question of “What’s the problem?” - there are changes which need to be made around how the whole business will operate including transparency and allocation of costs. This is really the tip of the MiFID II iceberg and it is becoming clear that the changes required are multi-faceted and need a more holistic approach than just throwing IT resources at the problem.
The solution lies with the current functional operating model for the organisation. This needs to be adapted to reach the final MiFID II state. Changes made in one area will, by definition, have a knock on effect in other parts of the organisation and may generate new and exciting activities. The overall impact can then be mapped onto a functional heat map of the organisation which highlights pain points.
Only once this work has been completed, can decisions be made around whether an issue requires an operational, data or IT change or some combination of all three. A simple example of gathering information around an investor’s profile will require additional information to be captured (application forms updated etc), an IT change to capture it and a data model change to store it. By definition, if you capture information then you need to do something with it! So somewhere further down the line this information will be needed for some purpose. Again this goes back to the operating model which defines how this data will be used and whether it needs to be updated or validated regularly. Does the data have a shelf life?
The final decision also comes down to profitability. If a particular activity is too onerous then is the margin associated with this piece of business worth it? If only a few investors have specific reporting needs that are out of kilter to the norm then does this business generate sufficient profit to make it worthwhile to keep them? A sobering thought.
As we all prepare for these regulatory changes, remember that IT changes cannot solve everything and an update of your operating model will provide the best long term solution.
Kinaesis has worked with many high profile organisations to identify and tailor operating models to meet regulatory needs. Kinaesis also provides MiFID II compliant software solutions for the Product Governance requirements.
To read more about our Regulatory work, click here.
For more information or If you would like to discuss how we can help your organisation then please contact firstname.lastname@example.org.
We’re a nation of gamblers. Whether it’s the National Lottery, Grand National, World Cup sweepstake, pub fruit machine or even the penny falls on Brighton pier. It’s not necessarily hardcore darkened rooms with swirling smoke and the sound of ice chinking in whisky glasses but more that we like a little flutter every so often. You just never know….
However, most of us gamble with huge sums of money every day without giving it a moment’s thought. Every day we go to the casino, put our money into a stranger’s hands and hope that they’ll do the best for us and we’ll come out on top. And depending on how well they gamble with our money dictates how our life will turn out. Scary huh?
Imagine, if you can, what it would be like to be starting work again with the knowledge that you’ve gained over the years. I’m sure there are many things that you’d do differently but I’m pretty sure your finances would be pretty high up that list. (If only I’d got into Microsoft, Apple, Facebook etc). However, I’m also pretty sure that if someone came to you now and said that they’d met a clever chap selling books out of his garage that would make millions but needed £25k then you’d be unlikely to invest). And why wouldn’t you invest? Concerns about legitimacy, trust, potential loss of £25k would probably be pretty high on your list.
So how does this relate to MiFID II? This amendment to the original Markets in Financial Instruments Directive (MiFID) has been introduced following the financial crisis to improve the functioning of the financial markets and improve investor protection.
Within the enhanced investor protection part of MiFID II, the concept of product governance is defined to ensure, in the simplest terms, that the right product is sold to the right person. Additionally, that the person or company selling a product to an investor understands their hopes and dreams but also the cold hard reality of their financial position. This attempts to ensure that the investor receives independent advice and is guided towards the most appropriate product or products.
It doesn’t stop there though. The product governance element also places a responsibility on the manufacturer (investment managers) to provide a target market for their products. This allows the distributor (seller) to understand for whom this product is suitable. The manufacturer can even define a negative target market which tells the distributor who shouldn’t buy this product.
An added complication is that the manufacturer has to keep an ongoing eye on sales of their products and ensure that they’re being targeted at the right people. So there is a whole new infrastructure of data exchange between the distributors and manufacturers. If you find yourself in the middle of that chain then you have to play pass the parcel.
There are many other parts to MiFID II but this piece alone creates significant IT challenges as it requires new solutions and additional data capture which all needs to be in place by January 2018.
And what happens if you choose to ignore the independent advice and gamble on something? Well Caveat Emptor of course!
For further information on MiFID II Product Governance or how Kinaesis can help you then please contact email@example.com.
We asked our Kinaesis subject matter experts why those who are not swept up by the BCBS 239 regulations should be interested in implementing a data governance framework. Kinaesis are supporting DSIBs, who are currently facing oncoming deadlines from January 2018 onwards to become compliant with the regulations, as we did previously with GSIB clients.
Our Banking leadership specialist team consists of:
Simon Trewin, Director and Head of Architecture at Kinaesis, 23+ years of experience in the Financial Services industry, leading major change programmes to consolidate and manage and organise data to bring regulatory compliance, actionable trading insight, and financial optimisation.
Barney Walker, Head of Consulting at Kinaesis, Strategic leader with over 20 years of experience in leading global divisions, delivering projects and defining strategy in technology, operations and finance.
Benjamin Peterson, Senior Managing Consultant at Kinaesis, Financial Technology expert and Data Architect in the risk and trading markets. In-depth experience of data analytics and solution architecture with 22 years working with Financial Services Data initiatives.
So, why should everyone else start concerning themselves with complying with the BCBS 239 Guidelines sooner, rather than later?
"First, it is important to understand, the BCBS 239 regulation is not there to be difficult. It is there for protection and to encourage best practice. It allows you the chance to know and understand your data and even, by extension, the business better. Studies claim that businesses who understand and trust their data and use it for the day to day operations and decision making have brighter futures. This is no surprise: undertaking steps to comply with BCBS 239 regulations leads to a superior understanding of your data. Good governance and a common understanding of information, drives efficiencies through the reduction in reconciliation and poor decision making based on inaccurate data."
"Another major consideration is the competitor aspect. With larger corporations adhering to the regulations by sorting and analysing their data, testing the limits, this gives them a significant competitive advantage over the smaller players. Ultimately, BCBS 239 is not going away. Firms that have adopted the full spirit of the principles have created a platform for a modern data-driven enterprise with significant competitive advantages over their outdated competitors."
"Not making a move to comply with BCBS 239 regulations defines and limits your growth. It is worth thinking of your future and seeing compliance to BCBS 239 as an opportunity, an enabler and one not to be brushed aside."
"On a final note, the better you understand your data and have a data governance framework in place then the easier it will be to implement GDPR by 2018."
So, if you agree that BCBS 239 compliance is relevant now and beneficial to your organisation, here’s how we can help you.
We offer unrivalled consultancy expertise with the data management and analytics solutions to match. If you are interested in what we offer precisely to deal with BCBS 239 challenges, click here for more information.
We would be happy to present a free customised consultation as to what we do to make the process quick, focussed and above all beneficial. For more information, please contact Phil Marsden at firstname.lastname@example.org.
We are delighted to announce that Phil Marsden has joined Kinaesis on 16th May 2016, as Head of Business Development. He has over 18 years of experience in Account Management within Financial Services and previously worked at both Icon Solutions Ltd and Rule Financial Ltd. Welcome to the team, Phil!
We previously announced that we were jointly sponsoring the 5th Risk and Data Aggregation Forum on the 28th and 29th April with our partner SAS. The event was focussing primarily on BCBS 239 and analysing the progress within the financial community in complying with these regulations.
Members of our senior management team Barney Walker, Simon Trewin and Benjamin Petersen contributed valuable discussion points through their presentation entitled ‘How to surf the data regulation wave and come out on top’ along with our partner SAS. This focussed on topical issues such as:
- How to propel an organisation from material compliance to mature, comprehensive on-going capability using industry leading tools and approach.
- How to build an integrated software platform that offers benefits and savings for the business, not just for compliance.
- How to gain dramatic insights from the lineage and quality of data, measuring progress and maturity with ground-breaking visualisation.
If you are interested in finding out more about the BCBS 239 nuggets of wisdom Kinaesis discussed at the event, click here to download our thought leadership piece.