4 Reasons Financial Institutions Need Data Governance

6551534889_9c8ae52997_nby Angela Guess

Steve Sarsfield of Smart Data Collective reports, “In working with clients in the financial services business, I’ve noticed that there is a common set of reasons why they adopt data governance.  When it comes down to proving value of data management, it’s all about revenue, efficiency and compliance.” The number one reason for adopting Data Governance in financial businesses is accurate risk assessment: “Based on new regulations like Sarbanes and Dodd-Frank, a financial services company’s risk and assurance teams are often asked to determine the amount regulatory capital reserves when building credit risk models. A crucial part of this function is understanding how the underlying data has the on the accuracy of the calculations. Teams must be able to attest to the quality of the data by having in place the appropriate monitoring, controls, and alerts.  They must provide regulators with information they can believe in.”

Number two is process efficiency: “If your team is spending a lot of time checking and rechecking your reports, it can be quite inefficient. When a report generated conflicts with another report, it may bring some doubt to the validity of all reports. There is likely a data quality issue is behind it. The problem manifests itself as a huge time-suck on monthly and quarterly closes.  Data champions must point to this inefficiency in order to put in place a solid data management strategy.”

Read more here.

photo credit: 401(k) 2013

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