Information chaos as pitfall of stricter supervision – here's how you avoid it

In an industry where oversight, transparency and traceability are key, one challenge plays a remarkably persistent role: digital fragmentation, or information chaos. Many financial services firms have an impressive arsenal of systems - from core banking and CRM to risk management tools, document management and shared drives. But despite that technological wealth, the answer to the question “Where is this document?” is surprisingly often, “Just searching...”

That search takes time, but it also carries risks. After all, how can you meet increasingly stringent regulatory requirements if your information is scattered across departments, systems and folders? And how can you report quickly, completely and verifiably if no one knows exactly what is current and what is out of date?

Supervision grows more specific – avoid information chaos and also make your information more specific

DNB and AFM are making increasingly stringent demands on the way financial institutions organize and make their information available. Not only the content must be correct, the origin and consistency must also be clear. Documents, reports and substantiation must be traceable and available extremely quickly - without first having to call five colleagues or click through twenty folders. Yet this is still very common. Audits and internal controls regularly reveal that important documents do exist somewhere, but are hard to find or difficult to reproduce. And that leads to necessary repair work, unnecessary stress and - in some cases - fines or reputational damage.

What does information chaos look like?

Fragmentation is not a technical but an organizational problem. It often arises unintentionally, as a result of business growth, mergers, new regulations or necessary or pragmatic IT decisions. In practice, you see this kind of fragmentation in the following ways, for example:

• a customer file that is partly in the CRM, partly on a departmental disk and partly as a PDF in a mailbox
• policy documents of which it is not clear what the latest version is
• reports that are stored or archived differently each quarter

The result: unreliability and uncertainty. Not because people don't do their jobs properly, but because the information provision offers no or insufficient support and guidance, but rather causes confusion and chaos.

The risks of information chaos in view

The risks of digital information chaos are real and palpable. Think of audit stress, where deadlines are jeopardized because underlying documents are lost. Errors in reports are also lurking, for example due to the use of outdated or incomplete data. It also leads to loss of time: teams do unnecessary duplication of work because information is not shared or simply cannot be found. On top of that, compliance risks arise when organizations cannot demonstrate that conditions have been or are being met. And precisely at a time when supervision is becoming more intense, digital and frequent, this is a risk you cannot ignore, and would much rather avoid.

Out of information chaos, towards structure and control

The solution is not in yet another additional system, but in consistency and tight control. Financial organizations that want to tackle fragmentation do so, for example, by making information accessible in one central location, so that departments work with the same up-to-date data. They deploy smart search technology that also finds old and unstructured data, and make clear agreements about version management, ownership and the use and management of metadata. In addition, they ensure integration between systems so that information is automatically updated and remains interconnected. The result: less risk, less stress and more time for what really matters - customer satisfaction, innovation and growth, for example.