M&S Money is a leading UK financial services company. A
wholly owned subsidiary of global banking leader HSBC, it retains a
close working partnership with UK-based Marks & Spencer, has a
very similar customer profile and collaborates on customer
activities.
Like all financial services providers, M&S Money had the
challenge of readying its information environment to
comply with the Basel II Capital Accord by 1 January 2007. In
doing so, the company wished to accomplish a number of operational
benefits, namely the assurance of customer data accuracy, reduction
of time taken to complete business analysis and increase
assuredness in the quality of data.
M&S Money therefore planned and delivered a data quality
project to ensure compliance with Basel II, which necessitates the
tracking and reporting of ongoing exposure to credit, market and
operational risks, and introduced improved data management
practices across the company.
Headquartered in Chester, M&S Money offers a range of
financial products including the &More credit card, travel
money and various insurance policies. It needed to meet Basel II’s
requirements in order to ensure that its credit risk management
practices met internationally recognised levels of consistency and
therefore enabled measurement of the adequacy of its capital.
Besides the
compliance requirements, there were broader data management
benefits that the company wished to accomplish. These centred on
the need to avoid potential customer frustration caused by
inaccurate data, enabling the company to undertake business
analysis and, therefore, sales activities with greater confidence.
In the company’s own words, it wanted to ensure that customers were
given “no surprises” when approached about new products and
services.
M&S Money’s
attitude to selling to Marks and Spencer customers has always been
that if it was not completely confident about data accuracy, and
therefore a customer’s likely interest, it would not approach them
at all, rather than risk any frustration. Enhancing data quality
would therefore drive improved business analysis and sales
practices.
The
Challenge
M&S Money has
grown significantly since it was founded in 1985 and has a
longstanding reputation for the quality and reliability of its
products. Compliance with Basel II therefore represented a special
challenge for M&S Money as the changes needed to its
information environment also had to provide a platform for optimum
levels of customer service and management.
Basel II is a
demanding piece of legislation that requires extensive expertise
and sophisticated data management capabilities if the quality and
integrity of data is to be consistently assured. M&S Money
therefore needed to deliver a data quality initiative that ensured
data was managed according to a set specification throughout the
whole information environment, imposing quality controls at many
points throughout the architecture while retaining centralised
control and management.
“We cannot ever
risk upsetting a customer because of problems with our data,” said
Neil Hershaw, Information Management Officer for M&S Money.
“Basel II’s compliance deadline presented us with both a challenge
and an opportunity – delivering high quality data to ensure
successful risk management, but also improving our data to drive
improvements in many other areas of our operations.
“Basel II sets the
bar high on required data management practices. Compliance dictates
the ability to correlate a significant history of consistent,
accurate and granular data. Equally, as an organisation we wanted
to ensure we could always undertake quantitative measurement of our
data to be utterly assured of its accuracy,” he said.
The Solution
M&S Money
chose the Informatica PowerCenter data integration solution as the
cornerstone of its project. The Data Quality and Data Profiler
modules were specifically selected to assure the quality of data
input and extraction from its Oracle datawarehouse.
Given the
impending Basel II deadline, M&S Money created a specification
in mid-2004 for a data quality initiative that would meet the
regulatory requirements and the Financial Services Authority (FSA)
mandates upon it, as well as delivering a platform for enhanced
organisation-wide data quality management. Informatica was chosen
because of PowerCenter’s technical attributes, its scope for
customisation and its ability to integrate a multitude of disparate
data feeds.
“There was
obviously the need to satisfy the data quality elements of Basel
II, but also taking this enhanced overall approach to data
management would give us greater confidence in our activities to
create sales and therefore help drive competitive advantage in the
market,” said Mr Hershaw.
The primary
operational driver was that M&S Money needed to be constantly
‘aware’ that its data was of the appropriate quality and that it
could always demonstrate clear management of the data. The new
platform’s Data Quality and Data Profiler were deployed as a data
quality management platform alongside the datawarehouse to ensure
that data feeds comply with the required quality levels
ensuring that BI data remains wholly accurate. Equally, the
solution had to support M&S Money’s new data management
procedures that were introduced as part of the project, so that any
changes which could negatively impact quality would be immediately
addressed and nullified.
In creating this
calibre of data quality management platform, the company also had
to consider the need to assure the sustained accuracy of data
derived from third party feeds, such as those from insurance policy
providers. Again, the new software provided the required support
for these disparate data feeds and therefore enabled all data
quality to be managed within a single framework.
The methodology
for the project began with defining data quality rules for the
relevant files and tables, coding those rules, running the data,
then analysing the data and creating an action plan for quality
assurance. Having now completed the project, data quality levels
are evaluated formally on a quarterly basis.
“We evaluated
several potential solutions and chose [the winner] because it has
vast experience in Basel II compliance and was the right solution
for our needs. [It] offered ease of use, support for our existing
IT environment and the ability to be customised to meet our precise
requirements. We needed to ensure that all data feeds, be they
internal or external in origin, were in line with our quality
specifications. The [new] platform has given us the ability to
provide that assurance to our business and to enable our analysts
to create rules for how the data should be treated, without having
to consult a programme or make changes to our systems,” said Mr
Hershaw.
The Results
The main driver
for the business was compliance with Basel II’s stipulations, which
was completed successfully a year ahead of the deadline. In doing
so, the company has created an assured level of data quality that
has enabled it to undertake business analysis and financial
reporting with greater confidence. A further gain has been the
reduction of the analysis cycle by up to 40%, meaning faster
comprehension and validation of information through less time
needing to be spent assessing the accuracy of the data.
M&S Money’s IT
team is now able to provide quantitative measurement of the data
held by the organisation, which was a broader goal of the
initiative. For a financial services company, that resource has
proven to be invaluable in providing the ‘engine room’ that drives
business development.
Once the new
system went live, it took business analysts just four days to
develop 20 Basel II business rules on the fly, deliver a data
accuracy scorecard, create profiles on account history tables and
develop other business rules that were then added to the
scorecard.
“Basel II has been
a blessing in disguise. Improved data quality and the ability to
measure that quality has impacted our business for the better in
several areas,” said Mr Hershaw. “It is clear that business
analysis has benefited, but also there are factors such as how we
evaluate our sales and marketing. We are now able to ascertain with
confidence what activities have caused a sale.
“We live by the
mantra that customers must be presented with no surprises, but we
also experienced no surprises of our own in meeting the
requirements of Basel II. It was a tough assignment but the
detailed planning and execution enabled us to minimise the scale of
the challenge. We’re now even more confident that we will always
deliver on our commitments to customers and can assure high levels
of data quality to assist in running our business,” he said.
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