In trying to remain compliant, these companies are coming face-to-face with some harsh realities about their information management. Data issues were identified in the survey as presenting the biggest problems to the SCV implementation plans, from getting data to maintaining its quality and simply processing it.
SCV also involves a substantial degree of specialist skill and resources in order to carry out the matching and deduplication routines. These often do not exist within companies and are recognised as a problem area. The timescale and infrastructure required are also barriers.
Reflecting the marginal involvement of marketing and the limited extent of revenue generating functions having a part to play in the SCV project, banks are also struggling to demonstrate that there will be other, non-regulatory benefits to be gained (see Chart Three). Threats of fines may stimulate action, but the motivation to continue to the conclusion often comes more strongly from positive incentives, such as seeing higher levels of revenue or lower churn.
Colin Rickard, managing director EMEA, DataFlux, commented: “This report highlights a shortfall in spending required to create SCVs in order to meet the FSCS requirement. This will have to be corrected in the second half of 2010 or firms risk facing significant fines and further reputational damage during 2011. It is clear that data quality and data integration are key compliance challenges.” Data managers at the heart of the SCV project have every reason to feel both neglected and under-resourced. Many of them point the finger of blame at the regulator itself, saying there has been a lack of appropriate and clear guidance (see Chart Four). The FSA has not issued a technical definition of what the database needs to be like, for example.
Data quality is the other big barrier for SCVs as banks discover that information in their existing systems is not up to the task. That may explain why there are complaints about a lack of resources and support being provided. Top-down support by chief executives does not appear to be translating into the right drivers for projects on the ground.
While banks are aware that non-compliance will have consequences, there is still a gap between having the fear and doing it anyway. Perhaps the absence of compelling business benefits from the SCV – especially the lack of marketing involvement – is to blame for an impending missed deadline.