Wall Street Letter VOL. XLV, NO. 35 - Nov. 7, 2013 | Page 9

7 – 13 NOVEMBER 2013

FEATURE

Interplay: data management
and data governance
Mark Johnson, vice president of global sales at Asset Control,
writes about the issues surrounding data management

R

ecent research from Deloitte
showed that 42% of firms do not
monitor what is actually going
on in their data management
processes*. At the same time,
62% feel this is the biggest thing
to improve in 2014.
That 62% are right. Effective data management is
fundamental to an effective risk management policy.
Unmonitored data management is uncontrolled
data management. And uncontrolled data management is uncontrolled risk management. In modern
capital markets, where data management is a very
real challenge, and transparency-seeking regulators
are flexing their investor-protecting muscles, that’s
an unsustainable position for any party to take.
Which is why the concept of data governance is
fast gaining momentum, particularly in financial
services circles.
Data governance is, in essence, a quality control
discipline for assessing, managing, using, improving, monitoring, maintaining, and protecting
organizational information. In other words, it’s not
just about the quality of the data that feeds various
operational decisions – although this is of course
critical. It’s also about the way data moves through
the organization, and what happens to it when it hits
key touch-points. It’s about the infrastructure that
ensures an organization’s IP rights are protected,
and managing costs effectively. Effectively addressing data governance touches on regulation, compliance and risk functions, as well as quality, accuracy
and completeness of data, and structures, standards,
policies and controls.
Inevitably, firms will need the right tools for this
practice, and effective data management solutions are
the essential foundation on which to build data governance. These systems have already delivered exemplary levels of transparency, visibility and highly granular

control over data consumption and distribution, and
enable organizations to embed data management
disciplines into formal technology practice. Usage
and change management functions ensure that data
governance benefits the organization by enabling cost
control, cost allocation and contractual compliance.
Critically they also break down the barriers between individual information silos that reside within
individual business units, which makes it easier to
access data and use it to serve the organization’s
business goals.
But addressing data governance is more than a
technology issue. Data governance is a state of mind.
It’s about having the right mentality within the organization and focusing on achieving and maintaining
best practice. Firms may develop a business case for
outsourcing data management, but firms still need
to know how data is touched, changed, persisted and
distributed throughout their operations.
One of the major data management challenges
financial institutions face is that no individual or
department takes ownership of critical information
and its quality and integrity. As a result, IT departments often become the owner by default. For a
discipline that touches on meta data management,
security policies, business process management and
risk management, a central data team and solution
can ensure successful data governance.
While the road to cultural change within financial
services organizations may be long, technology helps
speed the journey. Centralized data management
systems address much of the structural requirements
of a sound data governance program by cleansing
information, mapping its delivery to critical systems
and measuring its consumption. With the technology in place, executives can set about implementing
data governance strategies that will stick across the
organization.
*Research from Deloitte as reported by Rimes –
Benchmark Data Governance: Understanding the
Costs and Risks.

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