Chapter 19 - Data Flashcards
What is POPIA?
Protection of personal information act
Legislation in South Africa to protect the rights of individuals with regard to how organisations can process and maintain personal data.
What are the 8 conditions around which POPIA is structured?
(POPIA FSD)
Processing information
Openness
Purpose specification
Information quality
Accountability
Further processing limitation
Security safeguards
Data subject participation
What characterises big data?
Very large data sets
Data brought together from several sources
Data which can be analysed very quickly, or even in real time
What is data governance?
Overall management of the:
availability
usability
integrity
security
of data used in an organisation.
What guidelines will a data governance policy set out?
Specific roles and responsibilities of individuals
How data will be captured, analysed and processed
Privacy and security issues
Controls to maintain data governance standards with regards to data usability, availability, integrity and security
Monitoring adequacy of controls
Ensure legal and regulatory requirement are met
List the main risks to an organisation without proper data governance guidelines?
Legal and regulatory non-compliance
Inability to rely on data for decision making
Reputational issues
Incurring additional costs
List the key risks related to data use?
Inaccurate or incomplete data
Lack of credibility due to insufficient volume of data
Irrelevant data
Past data is not representative of future experience
Chosen data groups may not be optimal
Format of data is inappropriate
What is algorithmic trading? List the possible advantages and disadvantages thereof.
Investment training decisions are automated (no human intervention). Involves buying or selling financial securities electronically to capitalise on price discrepancies to try and make a small profit on each trade.
ADVANTAGES
Increased speed and efficiency of trading
Lower dealing costs on trades
Execution of complex trading strategies
Take advantage of temporary price discrepancies
DISADVANTAGES
Error in algorithm or data used to parameterise the model
Algorithm may not work properly in certain conditions
Trading may be suspended in turbulent conditions before trades can be completed
Possible domino effect on financial markets where algorithmic trading is prevalent
What are some of the main sources of data?
Published company accounts
Regulatory reports
Industry data
Data from other countries
National statistics
Internal data
Reinsurer
Industry-wide data collection schemes
What are industry wide data collection schemes? List the possible advantages and disadvantages of using this data?
Organisations that collect data from their member offices and then make available summaries of all the data collected. FSCA in South Africa. Continuous Mortality Investigation Bureau in the UK.
ADVANTAGES
Can compare own experience with that of the industry as a whole.
DISADVANTAGES
Heterogeneity within industry hinders ability to compare results.
Less detailed or less flexible data available
External data is often out of date
Data quality will depend on the quality of the systems of all its contributors from the industry
Some organisations do not contribute and so data does not represent the market as a whole
List possible reasons for heterogeneity within an industry-wide data collection scheme?
Companies operate in different graphical/socio-economic regions
Policies sold by different companies are different
Sales methods are not identical
Companies will have different internal practices
Nature of data stored by different companies may not be the same
The coding used for the risk factors may vary between organisations
List possible causes of data quality issues.
Poor management control of data recording
Poor management control of data verification process
Poor design of data systems
List important sources of internal data for an insurance company?
Proposal form
Claims form
