Takeaways from IIB Panel on "Reconciling Data Analytics and Protection"

Wednesday, October 24, 2018

With the rise of analytics within banking and finance, how are the benefits of this innovative approach to data being balanced with the appropriate data protection practices?

On October 15th, at the Institute of International Bankers’ Annual Risk Management and Regulatory Examination/Compliance Seminar, Exiger Global Head of Analytics Jonathan Ball moderated and joined industry experts for the panel, “Reconciling Data Analytics and Protection”, which explored how to put analytics to work while maintaining the safety and soundness that regulators, management and clients expect.

State of Data Analytics 

Over the last few years, the use of analytics in banking and finance has evolved from a novelty to a core strategic function that relies on computing power and huge data volume, velocity and variety (Big Data). Data analytics allows compliance professionals and business managers to digest more information, make better informed decisions, as well as anticipate challenges and opportunities. 

Data analytics can be used in a variety of ways, including to identify reputational risk issues related to: 

  • the Panama Papers,
  • the Russian Laundromat scheme,
  • and other bribery scandals.

It can also be used to isolate compliance control performance issues and control gaps, as well as amplify the effectiveness of audit and compliance testing by identifying key risk indicators for sampling. Additionally, bringing together different data sources into one larger dataset can help with identifying these trends through running simultaneous data queries. An example is leveraging Suspicious Activity Report (SAR) data in tandem with other data, such as locations, to anticipate subpoenas. 

Balancing Analytics and Protecting Data  

As we increasingly use the power of data to process information, enhance compliance efforts and maximize economic efficiencies, we must also understand the risks that are involved. With Big Data comes the threat of privacy breaches and cybercrime. Businesses and risk managers must balance the objectives of data analytics with careful sourcing of information, in adherence with local data privacy and bank secrecy rules. How do we effectively address these issues?

Data analytics has traditionally been associated with structured data analysis, such as spreadsheets, while analytics has trended towards unstructured data such as messages and documents. Today as we bring structured and unstructured data together, the terms are increasingly synonymous. The comparative ease of data access today means analytics is no longer solely about technical skills but more so involves recognizing the many values of data and possessing an inquisitive mindset. This demonstrates the need for matching subject matter experts with the right tools and technology.

Understanding the application of data analytics in financial crime compliance and its associated challenges with data privacy and cyber security are top of mind. Engagement of legal and data privacy officers at the beginning of a project will help ensure data is accessed without breaching regulations or laws. 

For more information on how Exiger can help your business balance the benefits of analytics with stringent data privacy protections, please contact our Analytics professionals. 

 
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Jonathan Ball, Managing Director | Global Head, Analytics

Jonathan is a Managing Director and Global Head of Analytics based in Exiger’s New York office, where he focuses on anti-money laundering (AML) and corporate investigations.