Q&A With Dan Cipriani, Head of Group ILM Transformation and Data Transformation BA Practice at HSBC
We sat down with Daniele Cipriani, Head of Group ILM Transformation and Data Transformation BA Practice at HSBC. He shared how buy-side and sell-side firms can improve their information infrastructure by automating their ESG data management.
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Why do you think financial services firms have not yet automated ESG data?
Many Financial services firms already have mature but manual data management processes. Instituting any strategy within any organisation requires a multi-faceted approach and is not something that is achieved at once. Undoubtedly there is a demand from both internal and external stakeholders to put ESG high on the agenda. All of which will come with greater automation across the market.
Challenges can be faced by financial services firms, where multiple data sources are required to reach meaningful and accurate conclusions. This is further exacerbated where scores, ratings and methodologies lack consistency across the market. The more mature this space becomes, the greater proportion of organisations will move towards automation. This creates better access to data.
Why do you think ESG data is causing so many challenges for financial services firms?
There is little consistency across the market, with the range of metrics and frameworks utilised varying based on size, location, and sector that the business operates in. With the continuing scrutiny from internal and external stakeholders on ESG data, financial services firms will seek greater automation and standardisation to deliver on their strategies.
As would be expected in most organisations, regulatory commitments will be at the forefront of their priorities. Increasingly, across the market, we are seeing the delivery of regulatory compliance as an enabler to the business outside of just risk mitigation. This is driven by practices adding business value to organisations and stakeholders alike, outside of simply meeting compliance obligations.
What are the key benefits of having real-time access to data?
Data, where managed appropriately, is an effective tool to support the identification of risk. This recognises areas where optimisation opportunities can be found. This can bring in improvements across our control environment. It can also bring significant value to financial services firms through the ability to make strategic decisions based on objective real-time analysis.
Accessing real-time data and reducing costs are essential benefits. Both of which are greatly enhanced through simplifying data architecture. Ensuring data is not only in real-time but that the business can be confident in its accuracy, this allows strategic decisions to be made objectively.
How do you think financial service firms can reduce the time they are spending validating data lineage?
Data lineage enables organisations to track data throughout its lifecycle. This enables financial services firms to document and trace touchpoints. Data lineage also supports the validation of its accuracy, which is a fundamental principle of ensuring its quality.
This is key for enforcing general data organisational standards, however, the reliability of data is essential. This will enable confident decision-making and process enhancements across all areas of the business. Data value is driven by its accuracy, and data lineage is a foundational principle of that.
Optimisation efficiencies can be obtained by taking a broader assessment of the IT architecture alongside business counterparts. This is achieved by rationalising business processes and applications, in hand with the underlying core IT infrastructure.
Where this is not controlled or managed strategically and holistically, data architecture becomes increasingly complex. It is this complexity that leads to some of the fundamental challenges you can see in these results.
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