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Data and Analytics in the Banking and Capital Markets sector

The capital markets industry is one of the most data driven industries. Electronic trading generates millions of messages every day. Regulatory and risk management requirements are challenging banks and financial services firms to capture, store, and analyse data that spans multiple years, departments and regions, at ever increasing levels of granularity. The amount of transactional data is growing at an exponential pace due to the ever increasing volume of transactions. Most of this structured data is scattered across multiple departments, geographies and systems, and quality is often of varying degrees.

Additionally, banks and financial services firms are being challenged to leverage the multitudes of new unstructured data such as emails, social media sites and blogs, as well as information from third-party providers of credit, spending, auto and legal data. These offer rich opportunities to generate greater customer value. The perceived operational challenges of harnessing this data are so daunting that many financial services firms fail to recognise that this data is one of their most valuable assets.

Strategy& estimates that the revenue from commercialising data will be up to $300 billion per year in the next three to five years across capital markets, commercial banking, consumer finance and banking, and insurance. This kind of opportunity is attracting interest from many, and traditional financial services firms are seeing non-traditional players entering into the space. Google, PayPal and Apple are quickly gaining ground in the payments space, demonstrating how non-traditional competitors can enter the landscape by having a data advantage. Strategy& estimates that leading financial services firms risk losing 10% or more of their potential top-line revenue to non-financial competitors within the next few years if they do not move quickly to transform their enterprise today.

Data and Analytics is allowing financial services firms to take a far more holistic view of how their businesses are performing, and providing more complete and insightful to support strategic decision making.

At PwC, we use data and analytics to help organisations in the banking and capital markets sector to improve:
  • Data strategy, management and governance
  • Financial crime detection and prevention
  • Operational resilience
  • Conduct risk
  • Transaction reporting
  • Internal Audit analytics
  • Regulatory compliance
  • Regulatory data management

by applying:

  • Data re-performance and remediation
  • Data quality and management
  • Data mining and analytics
  • Data visualisation

Data and Analytics tools for banking and capital markets:

Case studies

Customer complaint insight for a global bank

Our client, a global bank, saw an increase in customer complaints for its mortgage product suite. It asked us to collect insights from customer social media, web activity and call centre data.

We leveraged our SocialMind tool to monitor relevant social media postings and customised taxonomy models to track customer complaints and understand underlying customer sentiment. SocialMind is a social media listening and analytic app that helps companies learn what customers are saying about them and their competitors.

This insight allowed the client to understand current customer issues with the existing product range and prioritise the most urgent. Our insight has allowed the client to refine and improve its product offering, and establish ongoing alerts for potential issues.

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Employee data integration for a growing financial institution

Due to a series of acquisitions the client’s employee data had grown, but each acquisition brought with it data integration issues. As a result they did not have the required data architecture to hold global employee data, nor clear processes or governance to manage the collation of this data.

We worked with the client to create a data dictionary and implementa clear data governance model and structural data model. We also implemented a strategic data cleansing and updating approach.

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Helping a financial institution report accurately to the regulator

Under the Markets in Financial Instruments Directive (MiFiD), financial institutions are required to report trade activity on a daily basis to detect potential conduct issues. Our client, a UK financial institution, was concerned about potential issues with their daily reports which would result in non-compliance and potential regulatory action.

We independently re-constructed the client’s transaction reports from source trade data, using our interpretation of what should and should not be reported. We compared our results with the client’s and investigated any differences to identify the root cause and materiality. We then developed an operational visualisation dashboard which enabled the client to view the results of rules applied across their daily trade information to highlight areas where further investigation was required prior to submission.

Our solution allowed the client to provide accurate reporting to the regulator which resulted in no further action.

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Responding to rate manipulation allegations for a global bank

Our client was challenged by regulators to analyse its London Interbank Offered Rate (LIBOR) and Euro Interbank Offered Rate (EURIBOR) submissions data, in order to respond to allegations that both benchmarks had been manipulated.

We analysed data over a five year period at an individual, trading desk and bank level, and identified the potential level of questionable activity which may have taken place by its employees. This analysis helped the client define and implement the required remedial action.

Our work enabled the client to be able to focus their review on key risks and threats identified through the course of our work, and to set out their defence which they would present to the regulator.

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Deploying BI tools in a global financial services organisation

Our client is a large global financial services organisation who wanted us to determine if their current suite of reporting tools (OBIEE, SAS and Microsoft® Excel®) had appropriate BI capabilities to enable business users to quickly identify and report complex issues to senior executives.

The initial phase of the project identified that their current tool set required multiple hand-offs to a central development team and significant system reconfiguration in adding non-strategic data sources. This was causing substantial delays in responding to major risk problems.

An analysis of industry leading BI tools identified the most appropriate solution which met the requirements gathered in the initial phase, which PwC then helped to deploy to the rest of the organisation.

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Assisting a global bank with regulatory reporting

Our client had issues completing its regulatory reporting requirements. Data provided by the risk, finance and treasury functions was inconsistent. These issues adversely impacted their regulatory reporting and financial commitments, and more broadly their risk management and assessment by external credit rating agencies.

Working closely with the relevant teams, we consolidated the results of 14 separate work streams. Our team de-duplicated common data requirements and produced a data dictionary and a logical information model to help streamline data requirements. We then developed a database solution to assist in the ongoing capture of requirements, record lineage and deliver simplified statistics reporting across the entire banking group.

Our solution has facilitated improved data sharing and consistency and established a reference point and mechanism for improving communication between teams - especially across organisational groups and functional boundaries. It has also helped to illustrate functional overlaps between Risk applications and opportunities for data reuse.

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Data strategy for a major central bank

Our client was working on a strategic initiative to enhance its approach to data, a new approach to data and analysis and a ‘One Bank’ data architecture. This would address the Bank’s issues of a number of separate data management and processes across the organisation which had led to a lack of Bank-wide data standardisation, data management, data storage, data collection, tools and reporting.

We worked in partnership with the Bank to deliver a comprehensive report on its strategic data capabilities and requirements, based on our analysis of the Bank’s data collection and sourcing needs.

In order to compile the report we conducted a strategic data requirement exercise by engaging with over 100 Bank staff in a space of 10 weeks to collect over 500 unique requirements. We developed the key data themes and data principles that enabled the Bank to design the right architecture and drive the right behaviours towards data.

We also defined the Bank’s logical data architecture which will deliver a consistent and comprehensive solution for all users across the Bank; and developed use cases to test it. Finally, we helped the senior team members with their communication strategy to articulate the vision and requirements of data across the Bank.

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Contact us

Nick Bouch

Nick Bouch

Partner - Data and Analytics, PwC United Kingdom

Tel: +44 (0)7703 563564

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