Regulatory compliance has become a drain on many FS organisations’ capital investment programmes. Some of the emerging surveillance and reporting issues will likely be solved using big data technologies. It would appear beneficial if the same technologies and infrastructure could be used to solve wider business growth and performance issues. This could help jump-start some of those business improvement programmes that may have been mothballed due to lack of demonstrable ROI. This presentation focuses on the merits of creating a ubiquitous advanced analytics platform that will serve both the business and the regulator, without the need for large, upfront investment programmes.

1. From Surveillance
to Service Excellence
How to turn Compliance into
Competitive Advantage
© Copyright 2013 Saggezza. 1
Rob Rensman
July 2013

2. Governments as producers and consumers of Big Data
© Copyright 2013 Saggezza.
2
Volume Variety Velocity
How regulators accelerate the demand for Big Data and Analytics
This picture from Business Week illustrates the sheer volume of
legislation that is now in place and drives many institutions to considering
Big Data as part of the answer to solve compliance monitoring issues. We
are looking at the Dodd-Frank Wall Street Reform and Consumer
Protection Act (2010).
This presentation covers a
journey that may lead you to
see the light at the end of the
tunnel: big data on the one
hand allows you to tackle the
myriad of rules and regulations
you face on a day-to-day basis
and a powerful source of
untapped market- and
customer intelligence.

3. Financial Services Risk and Compliance Management
© Copyright 2013 Saggezza. 3
Headline regulatory frameworks and when they will be enforced*
*based on global coverage across geographies; some local enforcement may be required earlier, e.g. in US or Europe
There are three major pieces of legislation that dominate the compliance
landscape in financial services these days: Basel III, Solvency II and The Dodd-
Frank Act Most banks and other financial institutions, such as stock-brokers,
institutional investors, pension funds and hedge-funds are getting their house in
order in anticipation the respective enforcement dates that are set by the
regulators on both sides of the Atlantic.
The implementation rules
and plans are far from settled
and the enforcement dates
have been shifting. Most
investment banks, however,
have programmes in place to
address the underlying
issues, operational principles
and systems challenges to
remain on track for the
published enforcement
dates.

4. How Big Data Can Support Regulatory Compliance
© Copyright 2013 Saggezza. 4
The Volcker Rule (part of Dodd-Frank) is a case in point
SURVEILLANCE
Regulator
Risk/
Compliance
Ops
Finance
Group Reporting
Trade 1
Trade 2
Trade 3
Trade 4
Analytics
P/L Positions
System
1
System
2
System
n
Trade
Desk 1
Trade
Desk 2
Trade
Desk n
Trade 1
Trade 2
Trade 3
Trade 4
Trade 1
Trade 2
Trade 3
Trade 4
Asset
Class
Financial Institutions need to
create a capability to
acquire, analyse and act on
large volumes of
transactional data at high
speed to allow for real-time
and actionable decision
making with regards to
above or below threshold
values of certain types or
sources of transactions or
trades, and changes in
patterns of behaviour,
preferences or exposure
with regards to positions
taken.

5. How to Leverage your Compliance and deliver Value
Can we pursue a strategy of growth and innovation whilst satisfying the regulator?
AmbitionCompliance
Restrictions on proprietary trading
and hedging
Trade analysis and deal history (full
transaction traceability) combining
internal and external sources
Recapitalisation, liquidity and
stress testing
Complex risk analysis and
reporting
Customer perception and trust in
their bank of choice
Stability of operating environment,
balance sheet / P&L
Perform better risk and portfolio
management
Market insights by using
advanced analytics, combining
internal and external sources

6. Customer Service
and Retention
Product and
Service Pricing
Fraud, Identity
Theft and AML
Reputational Risk
and Sentiment
Analysis
Credit Risk
Use Cases That Drive The Need For Big Data
© Copyright 2013 Saggezza. 6
How can the dreaded ROI gap be plugged

7. How can we detect service
deteriorations and outages using
multiple data sources before they start
affecting the network nodes and lead to
critical loss of service?
Although the data can be extracted from
various sources, internal OSS systems,
log files and social media commentary, it
proved hard to prepare, visualise and
enact without a big data solution.
Lessons From Main Street
© Copyright 2013 Saggezza. 7
How other regulated industries have embraced big data to gain better insights
Detection Insight
Lube Insights delivered:
1. Improved ETL processing in Hadoop
2. Import and apply open source
algorithms to ensure the right
correlations could be made
3. Visualise the output in different types
of diagrams with dynamic data
4. Dispatch maintenance teams to carry
out preventative maintenance to
those nodes that displayed above
threshold levels of service
deterioration.
Telecoms Service Provider

8. Our Proposed Solution Allows You To Move Ahead
© Copyright 2013 Saggezza. 8
We help you remove the compliance barriers and deliver on new business insights
Surveillance Service Excellence
Consume
Analyse
Prepare
Collect
Messages,
Alerts,
Reports
Thresholds,
Breaches,
Tolerances
Trade &
Positions
Trading
Systems
Market Data
Systems
Existing Data
Stores
Insights &
Actions
Patterns &
Profiles
Trends &
Events
Customer &
Partner Data
External
Data
The functionality required to deliver surveillance allows you to start working on service
excellence: generating proofs of concept that allow the wider business to create insights and
actionable results based on data that was not readily available to the business user before

9. Strategy Alignment Will Raise The Game
Compliance becomes a ‘means to an end’
Advanced Analytics
AmbitionCompliance
Market
Data
External Behavioural
Data
Transactional (Trade)
Data
Customer
Data
CCO
CRO
BU Head
CMO
COO
CIO
From the compliance officer to the COO, right across to the BU Management Team: all will
benefit from an advanced analytics capability powered by big data.

10. Next Steps
© Copyright 2013 Saggezza. 10
Depending on where you are on your big data journey
1 2 3Starting Scaling Up Solidifying
Scalability
One Insight – High
Impact
Pilot Team
Few Data Sources
Risk
Centre of Excellence
“All You Can Eat”
Embedment
Insights On Demand
Business Growth
Distribution
Dedicated Team
Multiple Data Sources
Multiple Insights
Compliance
This is not a roadmap for adopting Big Data – your needs will be unique, but there are highlights on the way to maturity

11. Thank you!
© Copyright 2013 Saggezza. 11
Rob Rensman
VP Business Transformation
Saggezza UK
email: rob.rensman@saggezza.com