By Sharad Varshney, CEO OvalEdge
Today, every bank and financial services company relies on data to run effectively, support customers, and elevate above the competition. However, financial organizations must have a robust data governance strategy in place to ensure confidence in their data’s quality, security, and consistency.
While favorable business outcomes are the primary benefit of data governance, another is compliance. Companies operating in the financial sector must strictly adhere to the rules and regulations around data usage. Although the GDPR technically only applies to Europe, many organizations have customers protected by the statute, and fines have reached as much as $1.3 billion. That case was Meta, a company firmly rooted in the US.
In banking and financial services, data governance centers on the management, control of, and access to financial data. The process involves constructing actionable policies and procedures for data collection, storage, processing, analysis, and sharing.
The ultimate aim of data governance in the financial sector is to ensure that any data used is accurate, consistent, secure, and compliant with regulatory requirements. When implemented correctly, data governance enables banks and financial services companies to make informed decisions based on reliable data, improving operations and increasing customer satisfaction.
With the vast amount of data generated in this industry, it can be difficult to retain consistency, particularly when dealing with multiple data sources across different departments and for countless use cases. Data governance provides a framework for managing this financial data throughout its lifecycle, including collection, storage, processing, analysis, and sharing. With effective governance, financial organizations can make informed decisions based on reliable data.
Through the implementation of strict policies and procedures, the core outcomes of an effective data governance strategy for companies operating in the financial sector include ensuring data accuracy, consistency, transparency, accountability, and compliance. Ultimately, this leads to better-informed data-driven decisions, resulting in cost savings, improved resource allocation, and increased customer satisfaction and trust.
There are several steps involved in developing an effective data governance strategy for the finance sector. They include:
Organization: Using a data governance tool is the best way to organize financial data effectively. After identifying data sources and gathering metadata in a central location, it can be explored and analyzed in greater depth.
Security: Financial companies must have strict policies and procedures in place for collecting, storing, and using data and frequent reviews to ensure they are consistently in line with changing regulations and industry standards.
Management: Everyone across the organization is responsible for managing the financial data for their team or department.
Reporting: Reports are essential for auditing and compliance in a highly regulated financial sector.
When it comes to implementation, data governance tools should enable efficient and easy data collection, standardization features, and secure, centralized management.
About the Author
Sharad Varshney is the CEO and founder of data catalog solutions provider OvalEdge. He founded the company to blend his unique experience in big data technology and process management into creating a much-needed data management product. He has a Nuclear Engineering degree from IIT, the premier institute of technology in India. He can be reached at https://www.linkedin.com/in/sharadvarshney