Agility FinanceTech: Smarter Infrastructure & Technology Management for the New FS Organization. Sponsored by IBM.

Posted by Rod Nelsestuen, TowerGroup

The Obama administration has fired the first round in what promises to be a battle over regulatory reform of the financial system. The administration’s five statements published on June 17th are harbingers of the significant change reformers are planning. Specifics, however, are missing and financial institutions can rightfully fret about what all this means for their ability meet new and changing compliance mandates. But by examining one success story and broader industry collaborative opportunities we may get a sense of how to approach compliance challenges and how technology can create a flexible and responsive framework for the future.

First I want to mention that on June 30, 2009, I will participate in a webcast entitled “The New Compliance Mandate: Enterprise-Wide Transparency” with Greg McSweeney, Editor in Chief of Wall Street & Technology, Damian Trzebunia from IBM’s information software division, and Gary Rylander, an Associate Partner in IBM's Global Business Services. We will tackle the thorny (and growing) issue of new compliance mandates in the financial services industry. You can register for this TechWeb session at: New Compliance Mandate

Gary is one of my RiskTech blogging colleagues. He’s posted three recent entries that offer insight on how a financial institution might handle emerging compliance issues. In “Compliance is Good for the Bottom Line” Gary explains how Citibank redesigned its online processes in a fashion that enabled it to cut account opening costs by 85% and generate rapid growth in new accounts. The thinking that went into the redesign involved an analysis of the compliance mandates that were in play at the time. Citi pulled together a cross-disciplinary team that evaluated legal decisions that impact on a variety of regulatory requirements. By using this approach they were able to create a solution that had the greatest convergence across regulations while streamlining customer experience. In his two part blog entries on records management and eDiscovery, Gary brought technology into the realm of managing uncertainty through improvement in accuracy of information tracking and management. While many different studies were cited, collectively they point to the need for collaboration between different disciplines in addressing and solving multiple business problems in a cohesive way. Perhaps the greatest example of collaboration was cited in the second entry where he discussed the eDiscovery Reference Model, a process model developed by the Electronic Data Reference Model (EDRM) group, a voluntary consortium of over 70 companies from many industries that develops guidelines and standards for eDiscovery consumers and providers. EDRM works to improve processes and foster technologies that streamline compliance.

Solving new business problems requires collaboration across the institution from legal to leaders to IT professionals. Advancing technologies in serving the industry as a whole involves collaboration between skill sets even more diverse, from physicists to business analysts to policy makers. As new compliance mandates challenge the industry over the next two years, finding and working within established, well thought of consortiums will increase the intellectual capital a financial institution can field, and will shorten the investment in time and money needed to comply while at the same time seeking to deliver better business value in the marketplace.

Whether you join us on June 30 or listen to the recorded webcast later, we hope this session will expand your financial institution’s ability to collaborate on the seemingly conflicting goals of compliance and delivering better value in the marketplace.