Empowering Your Governance Organization
Across the finance industry, data governance programs assign responsibility to individuals, typically known as data stewards, to enforce the organization’s data governance policy. All too often, however, these organizations do not have the processes in place to ensure consistency, so data stewards create one-off spreadsheets or codes that only they can use. Although this process works in the short term, it’s not a scalable approach to data governance and moves data analysis further away from business users — and regulators.
For your data management program to be implemented consistently across the organization, you need to empower your data stewards with the right tools. By investing in the necessary infrastructure and data management software, you can enable your data stewards to work much more efficiently. In addition, by making the data more readily accessible, you can increase collaboration between data stewards and business analysts, better enabling data-driven decision-making and risk analytics.
A core objective of most financial regulations is transparency, so by implementing a standardized process for data governance, your organization will be better prepared when the regulators come knocking. For instance, BCBS 239 mandates that banks aggregate and report risk data to improve their resolvability. Because individual stewards are responsible for the integrity of the data, they oversee, empowering them with data management tools can help them to ensure compliance, without the need for ad-hoc trackers and codes.
Obtaining Executive Sponsorship
If you want your data management program to succeed, it’s crucial that you get executive buy-in from the beginning. This includes getting the Chief Information Officer (CIO), the Chief Financial Officer (CFO), the Chief Data and Analytics Officer (CDAO), and the Chief Risk Officer (CRO) on board with your plans. Depending on the size of your financial institution, the line of approval might even extend to the Chief Executive Officer (CEO).
Having executive sponsorship is critical to implement the types of organizational and technical changes necessary for a comprehensive Big Data and Governance strategy, like investing in new systems or hiring additional headcount.
From a regulatory perspective, executives desire that the company remains in compliance so that shareholder confidence is not negatively affected and there is no loss in revenue due to unnecessary fines. Although your C-Level executive will likely be removed from the tactical projects around achieving compliance, by demonstrating how your Big Data program is a vital aspect of the compliance process, you can more easily gain executive sponsorship.
Using a Data Lake to Break Down Your Information Silos
If you want to leverage your data as a strategic asset, breaking down data silos using a Data Lake is a necessary step. Not well governed Information Silos present a significant challenge when you consider that many government regulations mandate that information be easily reportable and trace-ability (lineage) is accessible to regulators. If you cannot easily pull critical information from separate systems into a consolidated report, you could be leaving the door open for Memo’s Requiring and Attention (MRAs), fines and even worse criminal prosecution.
As part of Basel Committee Banking Standard (BCBS) 239, Credit Exposure Credit Loss (CECL), and Know Your Customer (KYC), financial institutions need to achieve a consolidated, single customer view (SCV) of their clients along with tying unstructured data to the customer, and thus governance and a Big Data Management is necessary to provide that level of detail. This also involves comparing that consolidated customer information against US, EU, UN embargoes, financial sanctions, politically exposed people’s list, and other watch lists to ensure that clients are cleared to do financial business with US and/or European organizations.
Ensuring Data Quality
In an industry where an estimated 32 percent of customer data goes bad every year, trusting your data and remaining in compliance is an ongoing challenge for your company. Contact information can go bad for several reasons, most notably when a customer changes their address, surname, or telephone number. This can make communication tricky, and it increases the risk that confidential customer information (like bank account numbers or account balances) could be delivered into the hands of a perfect stranger. It’s not just current customer data that banks need to worry about, either. They must also put systems in place to ensure that new data entering the organization is accurate and fit for purpose.
From a regulatory perspective, your company has a responsibility to maintain accurate and complete records for your financial performance and customer information. Regulatory requirements such as Foreign Account Tax Compliance Act (FATCA) and Know Your Customer (KYC), require financial institutions aggregate customer information from a variety of sources and compare that information against government databases to determine persons who have indicia of US status. This includes gathering such information as a mail-able US mailing address, place of birth, or US telephone number. All of this requires the proper governance, quality management tied to a data standardization and validation solution on top of your Big Data Environment.
Establish Success Metrics
In for your company to have a successful Governance program, you must be able to measure and quantify your success. How you determine success depends on your organization’s priorities, but keeping up with regulations and avoiding fines is a sure way to put value on your program. Regulatory fines can run into the millions of dollars, so being able to avoid these fines is a significant accomplishment. In addition, as public news of regulatory infractions can affect stockholders’ confidence, avoiding such moments can have far a greater impact on the organization’s long-term performance.
Not only is your data management program saving the company from fines and serious legal consequences, but you can also measure the time savings you’ve achieved by implementing the right software for your data stewards and business users to be able to search and find information.
By making your staff more effective at their jobs, your team can spend less time on manually aggregating data from various sources and cleaning up reports. This is time that can be invested back into the business to do higher-level activities, such as data analysis.
Whatever is your companies, priorities setting up specific measured achievable and reasonable target success metrics along with tangible return on investment, ensures executive buy-in and sponsorship.
