Consultant Zone

Can you afford not to keep your records up to date?

We first reported on the accuracy of data held by lending institutions in June 2011, but it appears the issue is far from being resolved.

The recent fine levied by the Financial Services Authorities (FSA) on Bank of Scotland (BOS) for failures within their systems to keep accurate mortgage records for its customers, highlights there is still the need for independent data integrity and cleansing. A £4.2million fine could have been avoided had a structure been in place to identify errors as they occurred and quality control processes implemented. Where legacy systems exist, organisations need to make sure those systems are synchronized to make sure customers do not suffer. We know this will be seen as ‘stating the obvious’, but for how long will this most basic of principles of good business continue to be a seemingly impossible area for lenders to resolve?

Any organisation holding data needs to ensure it is accurate, but in the field of mortgage assets if you are preparing to buy or sell assets, early data integrity and cleansing is essential. Partial or full portfolio reviews can add value to the assets and bring peace of mind to transactions. Unless data in a portfolio has been fully verified as accurate, deal progress can be seriously hampered. Such analytics are often performed as a stand-alone exercise but value can be added by performing the analysis in tandem with a deep loan-level portfolio review.

Now, when retaining or holding assets, there is a need to avoid breaching FSA principles for business and to ensure customer satisfaction. An investment in an independent review of mortgage assets is a cost effective method of ensuring accuracy of data and helps bring peace of mind to directors and senior management as to the quality and accuracy of their mortgage book.

We are asked on a regular basis, as truly independent due diligence and audit suppliers to the financial services sector, to help in data integrity projects. The importance of external supplier reviews in this area is more important now than ever.