Instos ignorant of data quality

29-Nov-2017

By Sarah Kendell

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Large financial institutions were still largely ignorant of the importance of data quality in preventing large-scale errors and client remediation programs, according to QMV Solutions.

Addressing a media lunch in Sydney yesterday, QMV chief executive Mark Vaughan said the issue of outdated manual data reporting systems was prevalent at large and small financial firms, even among institutions that had already suffered reputational damage due to a mass data error affecting customers.

“Often the consumer sees these pretty apps and there is some good technology behind it, but in the back office, from the smallest firms to the biggest banks, there are lots of manual things like spreadsheets and Word documents being used,” Vaughan said.

“It’s difficult because a lot of organisations will say: ‘We’ve been through these [remediation] problems before, we think we’re okay now, so we don’t need a solution,’ and you’ve got to get them to understand that they are still exposed and it will happen again.”

Having started out assisting superannuation funds with member remediation programs, the group was now assisting a number of large financial institutions to organise data across their advice divisions, QMV principal consultant of legal and risk Jonathan Steffanoni said.

“The domain is slightly different to where we’ve specialised in the past, however, the principles are more or less the same – there are a set of rules which need to be complied with so it’s just a matter of defining them and executing those,” Steffanoni said.

QMV executive director Michael Quinn added the group commonly looked at large data sets from the major institutions’ client records in terms of the products that had been advised on, where the methods of data collection and storage were in some cases not as strong as among advisers who made use of high-tech platforms.

“Xplan is a great technology model in terms of data integrity – they’ve made sure through their standards that only good stuff gets committed to their data store,” Quinn said.

“IRESS have been an exception in the way they’ve structured their technology and the way information gets recorded inside their technology, because they ask people that have a licence to Xplan to validate and send in only good-quality data.”

Vaughan added data quality was also becoming an issue for super funds that were branching into the advice space as incorrect data used to assess a member’s financial situation could be a liability.

“More organisations are looking around advice and understanding the importance of taking data out and putting it into systems like Xplan, because it’s important that data is accurate if it is being used to give someone paid financial advice,” he said.

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