Adopting a strategic approach
Sound data governance and an enterprise approach to data management are key enablers of Solvency II. The GoldenSource EDM platform assists insurance and asset management firms with meeting the requirements of Solvency II by delivering a suite of data management and warehousing components that are designed for use within a risk department.
Firms that take a strategic approach to meeting Solvency II requirements, rather than focus on the minimum necessary to satisfy the regulation, are at a significant competitive advantage. Such forward thinking firms are better able to detect and mitigate risk, reduce capital reserve requirements, satisfy regulators and satisfy their policyholders.
GoldenSource empowers buy side firms to adopt a strategic response to Solvency II. Using our EDM platform, we enable firms to instill key data management best practices fundamental to Solvency II compliance—a centralized repository, golden copy creation and data governance.
A centralized repository
To support reporting requirements, a data warehouse must be in place to capture daily information including transactions and holdings, security and static data, valuations, and risk analysis results. This facilitates not only the provision of data into MCR or SCR calculation models, but also timely reporting.
Golden copy creation
Risk analysis, valuation, and reporting is only as good as the information it is based on, which includes information about securities, classifications, prices, market data, counterparties, collateral, ratings and positions. Enterprise risk management must cut across all lines of business. Proactive firms are implementing data management frameworks at the enterprise level. They need to reach into each silo, consolidate all necessary information, and manage the process of validating, cleansing, and normalizing disparate data into a golden copy. This clean data is then submitted to the risk models. The virtue of an enterprise data management framework is that full traceability is possible—an added benefit when it comes to satisfying regulatory inquiries.
Firms must implement strong data management processes. Use of an enterprise data management system provides a means to centrally document the assumptions used in the sourcing and delivery of data. Data exception processes can be controlled and closely monitored. Strict access controls can be placed on how data is viewed, and when data must be manually modified (to address or override incorrect or incomplete data). Such intervention can be entitled by user role and tracked in an audit trail. Presence of such a centrally documented and enforced data governance procedure will improve the outcomes of an Own Risk and Solvency Assessment, as well as its acceptance by the regulatory supervisors.