Although using big data to streamline business operations is becoming more common, it’s also creating new compliance issues. Sorting through massive amounts of information to determine what is useful and organizing it in the most beneficial manner poses new risks for keeping the information protected. Here are some reasons why.
Big Data Is Overwhelming
Although the majority of companies seek ways to increase their use of big data, only about half of those companies have the technology to cultivate and organize grand amounts of unstructured data. Also, approximately one-fourth of those companies are utilizing the data in a way that benefits the business.
A large issue involves determining methods for most effectively using undefined data that cannot be stored on a server for technology professionals to sort out. Because unstructured data needs context for understanding its importance and organizing it in a meaningful manner, compliance leaders struggle with determining what to measure and how to measure it.
Big Data Is Necessary
Once the data is sorted and used appropriately, predictive analytics may be used for identifying patterns, predicting outcomes and uncovering trends in the business and marketplace. The company’s business plan and resources may be better directed in areas that improve the bottom line while remaining compliant with laws and regulations.
For example, the Bank of Tokyo-Mitsubishi UFJ wanted to increase its predictive analytics while remaining compliant with the Dodd-Frank regulatory requirements for swap trades. After the bank took care of its compliance requirements, involving identifying every record and event surrounding each trade, the bank used those characteristics to create automated systems that identify elements of a good trade and what sales practices are most effective. The bank then used the information to restructure its sales model and improve the bottom line.
Big Data Creates Burdens
Taking in massive amounts of new personal data is causing issues with regulation and compliance. Although big data gives real-time feedback and helps compliance professionals more efficiently track and correct company risks, the systems need significant investments to create, maintain and analyze information, causing new regulatory risk that needs to be handled as it shows up. For example, as the amount of personal information being collected during cross-border data transfer continues increasing, so do regulatory requirements for protecting that information. Also, because the tracking and organizing of financial information is more complex now, financial firms must quickly identify information needed to remain compliant with the Dodd-Frank Act. In addition, consumers and the government have increasing expectations for protecting personal information from cyberattacks, further adding to the burden.
It’s important your company properly handles big data to stay compliant with financial issues. For additional help, get in touch with the financial compliance experts at CarterWill Search and Flex today!