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“Necessity is the Mother of Invention” Gaining Value from Regulatory Demands

“Necessity is the Mother of Invention” Gaining Value from Regulatory Demands. Kevin Butcher Senior Vice-President, Enterprise Systems, BMO Financial Group June 18, 2009.

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“Necessity is the Mother of Invention” Gaining Value from Regulatory Demands

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  1. “Necessity is the Mother of Invention”Gaining Value from Regulatory Demands Kevin Butcher Senior Vice-President, Enterprise Systems, BMO Financial Group June 18, 2009

  2. BMO Financial Group’s view on leveraging regulatory projects to gain a 2-for-1 benefit, creating customer and bank value • A regulatory need can be met in two ways: • Meet the specific need • Meet the need with a broader perspective • BMO’s Anti-Money Laundering example • The business value depends on sound governance to support Information Integrity: • Stewardship/Accountabilities • Standards, Controls and monitoring Necessity is the Mother of Invention: Gaining Value from Regulatory Demands

  3. The Regulatory World • Regulators tend to look at risk aligned to the COSO (Committee of Sponsoring Organizations of the Treadway Commission) framework: • There is particular interest for information management professionals to look at things through a compliance, reporting and information lens • At BMO, our view of Enterprise information is that information should simultaneously serve business strategy (Customer, Pace and Growth) and operations • Our Anti-Money Laundering (AML) efforts illustrate the 2 for 1 outcome COSO’S Enterprise Risk Management — Integrated Framework Necessity is the Mother of Invention: Gaining Value from Regulatory Demands

  4. AML from a Compliance Perspective • Anti-money laundering regulations require an understanding of all customer activity across the organization in order to ensure there is no money laundering • In order to drive the implementation of the AML project on the development side we worked with the business to link the project to strategic priorities, chiefly “knowing our customers” • What we have to do: consolidate profiles (information about customers and other people and organizations of interest to the bank) from many systems Necessity is the Mother of Invention: Gaining Value from Regulatory Demands

  5. AML from a Customer Perspective • Our customer focused program is dedicated to protect our customers’ financial interests and understand their financial needs • Efforts are focused on: • Building a formal framework to help us become more adept at asking for and interpreting customer information, resulting in better relationships • Introducing new processes, technology changes in products to ultimately result in better service • Fulfilling compliance of new mandatory regulatory changes for better protection of our financial system and our customers’ interests Necessity is the Mother of Invention: Gaining Value from Regulatory Demands

  6. The Customer View Necessity is the Mother of Invention: Gaining Value from Regulatory Demands

  7. AML and Challenges in Data Consolidation • In order to consolidate the customer profiles across the Enterprise the fields in numerous information systems across the LOBs must be drawn upon: The challenge is the general management of information across a complex multi divisional company (e.g. naming conventions) Necessity is the Mother of Invention: Gaining Value from Regulatory Demands

  8. Emphasis on Information Integrity • Whether using information with a customer, a regulator, or for decisions in the business, information integrity is key • Information Integrity has two core components • Information must be: • A faithful representation of reality • “Fit for use” Necessity is the Mother of Invention: Gaining Value from Regulatory Demands

  9. Information Integrity Accountabilities • Customer data integrity requires stewardship and custodial accountabilities: Necessity is the Mother of Invention: Gaining Value from Regulatory Demands

  10. Accountabilities for Access Privileges • Access privileges to customer information is one of the most complicated accountabilities: Necessity is the Mother of Invention: Gaining Value from Regulatory Demands

  11. Standards, Controls & Monitoring • Standards, controls and monitoring provide the infrastructure for information integrity Necessity is the Mother of Invention: Gaining Value from Regulatory Demands

  12. Concluding Thoughts & Questions Necessity is the Mother of Invention: Gaining Value from Regulatory Demands

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