# Data virtualisation: the secret weapon in the challenge for compliance
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2020-05-15
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Navigating Financial Services Compliance Challenges
Meta Description: Learn how to navigate the challenges of governance, compliance, and security in the FS sector, and unlock opportunities for revenue and customer experience
URL: https://financedigest.com/data-virtualisation-the-secret-weapon-in-the-challenge-for-compliancehtml

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_By **Charles Southwood,** Regional VP – Northern Europe and MEA at_ _[Denodo](https://www.denodo.com/en)_

Governance, compliance, security. In today’s landscape, these three pillars are never far from the boardroom agenda – regardless of an organisation’s size or sector. However, for those operating within financial services (FS) they’ve never been more important or harder to achieve.

Thanks to the [digital transformation](https://www.financedigest.com/why-financial-services-companies-should-consider-rfps-in-their-digital-transformation-strategies.html "Why financial services companies should consider RFPs in their digital transformation strategies") taking place across the sector, in recent years, there has been an exponential boom in the amount of data and personal information that FS companies need to manage. If used correctly, this [data could unlock](https://www.financedigest.com/three-ways-data-unlocks-business-value-for-financial-organisations.html "Three Ways Data Unlocks Business Value for Financial Organisations ") multiple opportunities, both in terms of revenue and customer experience initiatives.

However, before FS companies can reap the rewards, they need to be sure that they can adequately protect and [secure data](https://www.financedigest.com/normalizing-advanced-cloud-data-security-with-normalyze-from-amer-deeba-and-ravi-ithal.html "Normalizing Advanced Cloud Data Security with Normalyze from Amer Deeba and Ravi Ithal"), whilst also complying to mandatory regulatory requirements and governance laws. If not, they risk substantial monetary fines and potentially devastating reputational damage.

Getting ahead of these challenges has become the [key to success](https://www.financedigest.com/why-transforming-the-back-office-is-key-to-customer-experience-success-in-financial-services.html "Why Transforming the Back-Office is Key to Customer Experience Success in Financial Services") for FS organisations. But, it’s no easy feat. There are, however, certain steps that can be taken to [relieve the many pressure](https://www.financedigest.com/how-communication-technology-can-help-relieve-pressure-on-staff-in-the-financial-services-sector.html "How communication technology can help relieve pressure on staff in the financial services sector ") points along the path to compliance, many of which are still being overlooked.

**Regulation waits for no man, woman or FS business**

Regulatory compliance in the financial [services sector](https://www.financedigest.com/protecting-the-uk-financial-services-sector-from-cyberattacks-now-and-in-2023.html "Protecting the UK financial services sector from cyberattacks now and in 2023") is a complex field to navigate. Whether its potential financial fraud or money laundering, risk comes in many forms and, due to their very nature, FS [businesses are under heavy scrutiny when it comes to achieving the highest levels of data governance](https://www.financedigest.com/where-do-small-businesses-turn-when-government-support-dries-up.html "Where do small businesses turn when government support dries up?"). When tackling the sources of risk, it’s critical to [bring together](https://www.financedigest.com/impact-com-announces-partnerships-experience-event-ipx-bringing-together-all-players-in-the-partnership-economy-and-featuring-special-guest-trevor-noah.html "impact.com Announces Partnerships Experience Event, iPX, Bringing Together All Players in the Partnership Economy and Featuring Special Guest Trevor Noah") a diverse range of data sources in order to look for patterns and anomalies.

The General [Data Protection](https://www.financedigest.com/modern-data-protection-how-organisations-can-protect-against-cyber-attacks.html "Modern Data Protection: How organisations can protect against cyber attacks") Regulation, which encourages organisations to comply with more stringent requirements for the protection of personal data, is probably the most cited and talked-about legislation of its kind. Since its implementation in 2018, many companies have fallen foul of its guidelines and paid the price; Google being one of the first, with a fine of [£44 million](https://www.bbc.co.uk/news/technology-46944696).

For FS organisations, GDPR is just the tip of the iceberg. In recent years the [Markets in Financial Instruments](https://www.financedigest.com/musical-instruments-market-insights-deep-analysis-of-key-vendor-in-the-industry-2022-2026.html "Musical Instruments Market Insights, Deep Analysis of Key Vendor in the Industry 2022-2026") Directive (MiFID II), the requirements for central clearing and the second Payment Service Directive (PSD2) have all forced significant changes on the banking environment and brought with them new hurdles to overcome. These regulations are not optional. They must be met both effectively and quickly if an organisation is to avoid the number of repercussions that go hand-in-hand with failure to comply.

But, thanks to the digitisation of the industry and a new wave of innovation which – in many ways – has been encouraged by the increasing popularity of [challenger banks](https://www.financedigest.com/the-rise-of-challenger-banks.html "challenger banks") and fintech startups, many FS companies are currently juggling a never-ending stream of data. This data is often complex and of poor quality. Structured and unstructured, it is stored in many different places – whether that’s in data lakes, on premise or in multi-cloud environments.

It can be extremely difficult to know exactly what information an FS organisation holds, let alone ensure that this information meets the requirements laid out by [industry regulations](https://www.financedigest.com/activision-aims-to-help-uk-regulator-better-understand-our-industry.html "Activision aims to help UK regulator ‘better understand our industry’").

**Taking control**

This is where [modern technologies such as data](https://www.financedigest.com/how-financial-services-can-secure-data-and-build-trust-in-todays-modern-environment.html "How financial services can secure data and build trust in today’s modern environment") virtualisation can help. By providing one single, logical view of all data, no matter where it resides, or what format it is in, data virtualisation grants early and high visibility of information, making the compliance [challenge easier to overcome](https://www.financedigest.com/overcoming-challenges-faced-in-business-from-one-woman-to-another.html "Overcoming challenges faced in business: from one woman to another"). By using a ‘logical’ view for [data insights](https://www.financedigest.com/marine-big-data-market-to-expand-at-cagr-of-21-5-during-forecast-period-tmr-insights.html "Marine Big Data Market to Expand at CAGR of 21.5% During Forecast Period – TMR Insights"), governance, security and compliance can also be centralised, vastly improving control and obviating the need for repeatedly moving and copying the data around the enterprise. This can have an immediate impact in terms of enabling FS [organisations to avoid data](https://www.financedigest.com/avoiding-a-big-data-car-crash-how-to-organise-your-data-to-detect-fraudulent-claims.html "Avoiding a big data car crash: How to organise your data to detect fraudulent claims") proliferation and ‘shadow’ IT.

Many organisations have ‘containers’ of [data which already hold a lot of the information needed to ensure compliance](https://www.financedigest.com/how-finance-firms-can-unify-two-data-approaches-to-improve-both-compliance-and-security.html "How finance firms can unify two data approaches to improve both compliance and security"). When new regulations emerge, much of that data will have been worked on already and potentially consolidated in one or more data lake or data warehouse. If a new regulation is put in place, data virtualisation provides a [way](https://www.financedigest.com/four-ways-data-and-ai-can-transform-financial-services.html "Four ways data and AI can transform Financial Services") to easily find and access that data so FS organisations can respond – without having to worry about alternative versions of that data – and ensure that they remain compliant from the offset. Companies who have introduced data virtualisation are typically [reporting savings in development and deployment times](https://www.financedigest.com/credit-suisse-executives-reassure-investors-after-cds-spike-financial-times-reports.html "Credit Suisse executives reassure investors after CDS spike, Financial Times reports") of 70-90% over traditional methods.

In addition to this, a longer-term [benefit of data virtualisation is that it makes a business](https://www.financedigest.com/how-choosing-the-right-mtd-for-vat-software-can-maximise-business-benefits.html "How choosing the right MTD for VAT software can maximise business benefits") substantially more agile as it is possible to set up access to governance rules and personal data audits. Operators can easily select who has access to what information within the wider organisation. They can alter settings for sharing, desilo-ing, masking and filtering through defined, role-based [data access](https://www.financedigest.com/businesses-seek-better-access-to-data-to-support-environmental-objectives-bright-data-research-reveals.html "Businesses seek better access to data to support environmental objectives, Bright Data Research Reveals"). This ultimately enables FS organisations to take [back control](https://www.financedigest.com/back-to-basics-for-cost-control-as-the-usual-levers-lose-value.html "Back to basics for cost control as the usual levers lose value"), even down to the finest details.

**The key to compliance**

[Compliance is an issue not set to go away](https://www.financedigest.com/ifrs-15-moving-away-from-short-term-fixes-is-vital-for-effective-compliance.html "IFRS 15: Moving away from short-term fixes is vital for effective compliance") anytime soon. In fact, its role is only likely to increase as law catches up with [technological advancement](https://www.financedigest.com/cardiac-valvulotome-market-growth-latest-trends-top-players-competition-technological-advancements-outlook-and-forecast-2028.html "Cardiac Valvulotome Market Growth, Latest Trends, Top Players, Competition, Technological Advancements, Outlook and Forecast 2028"). While companies may think they are ahead now, that could all [change with the introduction of a new regulation](https://www.financedigest.com/german-regulator-stays-vigilant-as-meta-changes-vr-headset-rules.html "German regulator stays vigilant as Meta changes VR headset rules") or mandate. If we look back, we can see where this has happened before, most recently with GDPR. Many organisations were left [changing their data](https://www.financedigest.com/sterling-little-changed-after-mixed-labour-market-data.html "Sterling little changed after mixed labour market data") strategies with just days to spare, desperate not to have to pay the price.

For FS organisations, ensuring that their [operations and processes align with the latest regulations](https://www.financedigest.com/russian-regulator-says-mobile-operator-mts-breached-anti-monopoly-laws.html "Russian regulator says mobile operator MTS breached anti-monopoly laws") is of the utmost importance. It is only then that they can make the most of the huge amounts data that they now hold to inform [business decisions and stand out from their competitors](https://www.financedigest.com/covid-19-is-impacting-the-variable-speed-drive-market-size-business-revenue-forecast-leading-competitors-and-growth-trends-2028.html "COVID-19 Is Impacting The Variable Speed Drive Market | Size, Business Revenue Forecast, Leading Competitors And Growth Trends 2028").

By providing a 360-view of all information stored across an organisation, data virtualisation is emerging as the [secret weapon](https://www.financedigest.com/chatbots-the-secret-weapon-to-customer-engagement.html "Chatbots: The secret weapon to customer engagement?") in the battle for compliance.


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