Enhancing Regulatory Reporting for a Regional Bank

Many clients, including financial institutions, lack a cohesive dataset that allows them to stitch together the disparate entities that comprise their customer and counterparty base. Corporate structure mapping can be extremely complicated, and determining alignment of security the level exposure can create additional layers of complexity that cannot be easily solved. Our cohesive Cross Reference Data and Company Relationship suite provided a holistic solution to a customer looking to solve a challenge presented through new bank regulatory requirements

Banks of all sizes are encouraged through both regulation and internal risk policy to ensure an appropriate understanding of counterparty exposure across their suite of business lines and the customer’s corporate structure. There is increased oversight of larger banks, including demanding reporting requirements from various banking regulators. 

Before purchasing our solutions, the regional bank lacked a reliable way to manage these challenges. Any efforts to address counterparty exposure were conducted manually, which is not a sustainable long term solution. Importantly, there is no other vendor that captures and maintains the suite of entity data, as well as corporate structure data.

Pain Points

Prior to onboarding our solutions, the bank experienced several specific pain points:

• Stale records
• Inconsistent relationship mapping
• Lack of understanding of exposure across their business lines
• Compressed timeline – as the client became a Category 3 bank, new reporting requirements were coming with higher scrutiny, and they needed to act quickly. It was clear that they needed production possible.
• Manual Process – the bank was manually identifying and aggregating its exposure to a single counterparty across the entire corporate tree. Doing this process was manually, which doesn’t scale well with Category 3 expectations.  The Cross Rerence package allows them to meet more complex regulatory requirements in an automated fashion. 

The cost of not addressing these pain points included the risk of regulatory infractions. During the sales process, we also uncovered additional, possibly unrealized, pain points. Beyond regulatory reporting, there are other users for this data that will help internal systems and relationships across business lines to drive revenue and reduce execution costs.

Solutions Provided

To address these challenges and enhance regulatory compliance prescribed the following solutions:

• Cross Reference Suite and Company Data: This holistic dataset provides the client with everything they need to solve for entity and security − level exposure mapping across their business lines. 
• Business Entity Linking (BECRS): provides you with immediate cross-reference capabilities for millions of public and private entities using standardized and proprietary identifiers.
• Global Security Identifiers (GICRS): Streamline your operations and create customized data mapping systems for securities and trading items such as mutual funds, equity, municipals, commercial papers, bonds, indices, and floating rate notes.
• Industry Sector Linking (ISCRS): Leverage multiple levels of industry-sector classification taxonomies for more granular company comparison and screening.

The bank are still implementing the Cross Reference solutions their systems with the mapping provided.

Results Achieved

The regional bank has been using our solutions for two weeks. As a result of our partnership, the bank will be able to meet regulatory deadlines for counterparty exposure reporting. 

Key Performance Indicators (KPIs)

The bank has measured the success of our partnership by noting that there have been no regulatory infractions, demonstrating effective compliance with regulatory requirements.