IoD Day 3 – Nordea – Risk Strategy and Data Strategy

The drive by Regulation to shape IT Strategy snd Architecture in the Banking environment covering Risk Data Aggregation

First requirement is faster than 13 day re[orting of Capital Adequcy (used to be required monthly or quarterly.

Needs to merge silos between diffeerent groups.

Need to reduce complexity.Counterparty credit exposure (T+0 requirement, i.e. at close of play.) however problems with consolidation cycles of the various different books of account. Part of the problem is data correction taking 8 days. Data sourcing is to take less than 3 days.

Reports needed vey much more quickly.

Fundamental need for clean data capture with full integrity.

Four areas involved

1) Governance Principles

2) Risk Data Aggregation capability

3) Risk reporting practices

4) Supervisory review, tools and cooperation

The Architecture Solution

Match Trading and Banking books

need architecture in four layers

1) Reporting layer (Semantic between layers 1 and 2)

2) Persistency layer for calculations

3) Transformation

4) Sourcing

Critical issue is existing architecture and complexity.

Need to re-use components and to manage dependencies and frequency of data sourcing with strong management of the data quality and lineage.

Needs fundamental changes to existing capabilities and systems, including reduction of the business silos.

Issues with granularity and latencies of the data cycles and business process mapping.

Critical relationship issue around the Legal Entity Identity and Legal Entity Hierarchy with perfect accuracy and taking account of daily changes to the relationships. Clear Change management problems.

Another challenge is relation between Asset and Collateral records (they have 4 collateral stores.

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