Teradata Corporation, a provider of enterprise data warehousing solutions, was invited to provide testimony before the U.S. House Financial Services Committee's Subcommittee on Oversight and Investigations, joining a panel of experts and stakeholders on the topic. The hearing, titled "Utilizing Technology to Improve TARP and Financial Services Oversight" was largely focused on driving accountability and transparency through database technology. Dow Jones & Company, the U.S. Chamber of Commerce, the SAS Institute, Inc, and the Center for Democracy and Technology were also among the witnesses.
Teradata testimony was delivered by Dilip Krishna, a specialist in risk and financial management for Teradata's financial services and insurance organization. "Thorough and effective oversight of the financial system is critical to our success," Krishna says. "This is where information technology must take its place in the process. All around us, we see evidence that the proper use of technology can generate immensely valuable results while at the same time improving efficiency and reducing costs. Now is the time to apply technology to address this most important issue."
Krishna observes that a vast amount of work has already been done with technology in finance. "Technology has advanced to the point where the oversight of large, complex financial enterprises is now feasible," he relates. "In fact, large organizations around the globe routinely use technology for financial risk management. One of the key areas in this regard is in the management of risk data and analytics."
Krishna cited the ways financial firms employ data and analytics to better manage risk. "Information technology makes it possible for companies to collect, merge and analyze very large amounts of customer data in real time to better and more efficiently serve their customers, leading to competitive advantage," he says. "Technology has also made it possible for financial firms to manage their risks effectively while managing substantial growth and consolidation in their business lines."
However, these systems were not enough to stem the recent economic crisis, Krishna continues. "Technology can only be useful if it is employed properly," he explains. "It was not properly employed to deal with the types of toxic assets that caused these catastrophic losses." What is needed to prevent future financial meltdowns, Krishna says, is greater transparency into the operations of financial institutions that doesn't undermine consumer privacy.
Krishna adds that there already are a number of offerings on the market that deal with the quality of raw data. "Technology for data warehousing has developed to the extent that it is not uncommon to see systems where firms are able to react in seconds to customer activity, yielding huge returns on the investment in technology," he says. "Finally, analytics and visualization technologies have also advanced significantly so that complex calculations can be completed and presented extremely rapidly for quick response. In line with what may be expected of technology advances in general, not only are the capabilities improving at a tremendous rate, but costs are also dropping precipitously. Simply put, the time has never been better for leveraging information technology to create a strong system of financial oversight-it is proven and successful and can be implemented today."
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