Assure Basel III Endgame Compliance with a Self-defined Data Fabric

“Basel III Endgame” refers to the final set of rules in the Basel III framework. These rules focus on the amount of capital that banks must have against the credit, operational, and market riskiness of their business and are aimed at strengthening regulation, supervision, and risk management in the banking sector. Basel III Endgame requires any bank with assets of $100 billion or more to be aligned with its standards.  

Non-compliance with Basel III Endgame can result in serious penalties encompassing fines, sanctions, restrictions on banking activities, and reputational damage.  Thus, for large banks, establishing a Basel III Endgame compliance regime is a top priority. In order to comply with Basel III Endgame, banks need accurate and timely data to assess their capital adequacy, liquidity positions, and risk exposures. They also need to build robust data governance frameworks to ensure the accuracy, integrity, and confidentiality of regulatory reports. Orion Governance’s Enterprise Information Intelligence Graph (EIIG), a self-defined data fabric, can help banks accelerate compliance with Basel III Endgame.

Unified and Trusted Data Foundation

Over the years, banks have adopted various and complex technologies in their data landscape. To aggregate and analyze vast amounts of data from all these technology sources for Basel III compliance is a huge challenge. EIIG automatically ingests metadata from more than 70 sources including the mainframe (COBOL, JCL, PL1, IMS) and Python and intelligently stitches it into an industry leading knowledge graph. With EIIG, banks can establish both intra- and inter-system connectivity and gain a centralized holistic view of their enterprise data landscape. Granular data lineage with field level details shows, on multiple levels, how data flows from source to destination. EIIG also integrates various trust metrics like ownership, certification, user rating to build a trust score that is propagated all the way to the reports. By doing so, EIIG provides banks with a unified and trusted data foundation for Basel III compliance. 

Robust Data Governance

EIIG is an all-in-one data governance platform with capabilities encompassing data lineage, data catalog, impact analysis, metadata analytics, augmented data quality, trust propagation, and data observability. With EIIG, banks can more easily discover, access, and analyze data they can trust for Basel III compliance. For example, with easy access to reliable data on a near real-time basis, banks can calculate their capital ratios accurately and measure and manage their liquidity risk effectively. 

Timely and Accurate Reporting

Timely and accurate reporting is critical in meeting regulators’ reviews and audits. EIIG incorporates key data quality metrics and monitors data quality in its lineage graph throughout the data pipeline leveraging active metadata. It also offers a powerful metadata change capture and notification feature to alert stakeholders such as compliance officers so that they are promptly aware of any changes in the data underpinning a report and take actions accordingly. Since Basel III reporting is an ongoing process, EIIG can enable banks to continuously monitor, review, and validate reported data automatically. By doing so, EIIG can also enhance risk reporting and provide stakeholders with more transparency about their risk profiles and capital positions. 

Impact Analysis

At banks changes are constant, changes about product offerings, lending activities, investment decisions, and so on. With EIIG’s impact analysis, banks can visualize dependencies and learn what downstream systems related to regulatory metrics such as capital ratios and liquidity metrics may be impacted if changes are made. This can help banks ensure adherence to regulatory standards when they make changes. 

Automation

Leveraging AI and ML, EIIG is a highly automated system encompassing metadata ingestion and stitching, mapping of terms to assets, rules to assets, policies to assets, and domain to assets, data lineage and data catalog creation. All this automation can help banks accelerate and assure Basel III Endgame compliance since such complex regulatory requirements cannot be met with manual efforts which are error-prone, unsustainable, and costly.

To sum up, EIIG enables banks to automate metadata ingestion from a wide range of technology sources and establish a single source of truth. It augments data quality, enhances data accuracy and integrity, and simplifies data discovery and access. It also facilitates data validation and reporting processes. All these powerful capabilities help banks to accelerate Basel III Endgame compliance and effectively manage risks in the current regulatory environment. 

Ready to learn more? Schedule a demo to learn more about how EIIG can help your enterprise handle Basel III Endgame compliance.

About the Author: Niu Bai, Ph.D. is the Head of Global Business Development at Orion Governance, Inc. Connect with Niu on LinkedIn.