What is data processing?

Find out what data archiving actually is, and why it's important for the compliance function.

Article
21 March 2024 2 mins read
by Jennie Clarke

What is data processing?

Data processing involves organizing, analyzing, and interpreting vast amounts of information and enriching it in a way that brings value to organizations.

Tasks can include collecting transaction data, calculating risk metrics, and generating reports for regulatory compliance, investment decisions, and fraud detection.

Simply defined, data processing is transforming raw data into valuable insights to drive informed decision-making and smooth operations.

Examples of data processing

  • KYC/AML checks: Analyzing customer data to verify identities and assess money laundering risks.
  • Trade monitoring: Scrutinizing transaction data for suspicious activity like market manipulation or insider trading.
  • Regulatory reporting: Generating financial data to meet reporting requirements.
  • Compliance testing: Analyzing data to ensure adherence to internal controls and regulatory policies.

What is data processing under GDPR?

The European Union (EU) General Data Protection Regulation (GDPR) requires organizations in the region to adhere to strict rules relating to the gathering, processing, or use of personal data. This includes collecting, recording, organizing, structuring, storing, retrieving, disclosing by transmission, disseminating, erasing, and destroying data.  

Data processing for U.S. financial institutions 

In the U.S., financial institutions are legally bound to ensure meticulous data management. This encompasses both secure storage and accurate processing, as mandated by various regulations from the Financial Regulatory Authority and the Securities and Exchange Commission.

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Published 21 March 2024

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