Data Governance: Asset Management’s X Factor

The path to robust governance remains an ongoing journey, though there is growing recognition that organizations can’t put this initiative off any longer.

Peter Travers, Vice President and Principal of Global Solutions

In 2011 and 2012, data governance initiatives were primarily a response to the increasingly complex demands of reporting and marketing compliance. These mandates were also premised on solving issues of privacy and data protection. Fast forward five years, and today data governance is seen as helping set the stage for real-time analytics that aid the front office and provide crucial support informing business decisions. As investing becomes increasingly global in scope, and alternative and non-traditional asset classes become more prevalent, it is no exaggeration to say that data integrity could be a make-or-break factor for many in asset management.

Best-in-class data governance provides a formal set of standards for how data is securely collected, stored, distributed and processed. Not only does this safeguard an organization’s data and ensure that it is accurate and accessible, it makes it available for decision making on an enterprise-wide basis—enabling managers to predict trends, react quickly to market changes and respond to competitors. Whether the catalyst is the replacement of obsolete infrastructure as part of an operational transformation project or, rather, reflects the pursuit of new business opportunities, data governance can have a profound impact on the overall agility of the organization.

As data ownership does not necessarily correspond to traditional business functions and boundaries, many investment management firms have been slow to adopt formalized governance policies. Today, however, that data is increasingly recognized as a mission-critical asset that can boost business intelligence in addition to helping reduce compliance risks. As a result, we are finding that data governance has become a strategic and organizational priority. Business leaders are also discovering that these programs can have a transformational effect on their businesses.

We have had a number of clients who have remarked that beyond the benefit of a data-centric approach as it relates to implementing new systems and technology, they have also realized material value from the cross-functional partnerships that are necessary to drive governance, which have led to dramatic improvements in organizational effectiveness. Creating a culture that encourages and drives staff to consider data governance a part of every business function’s standard operating procedure serves to embed data in key decision-making processes. It also requires inter-departmental collaboration between data, technology, and business development professionals. This represents a notable transition from the past when there would be an over-reliance on traditional IT governance, which made it more difficult to see how data from different business functions related to each other. Now that senior executives understand the value of data governance, we are seeing a shift in terms of who owns the process.

To provide even greater oversight, executives are beginning to hand over ownership of the data to dedicated data governance teams. And as data management evolves into a business function in its own right, a growing number of firms are appointing chief data officers to take responsibility for data quality and security, as well as optimizing technology and systems.

We have highlighted the key principles that are universal to all successful data governance strategies in past blogs. And for those that are considering ways to implement a governance strategy, we have found that the most successful firms are those that prioritize the initiative in carefully managed phases. Data governance is an ongoing journey rather than a destination, but as it moves up the business agenda, asset managers that have delayed their departure are now racing to catch up.

I will be hosting a panel debate with a number of our clients at Engage 2016, our client conference, which runs November 13-16, to discuss how they are implementing and maintaining data governance programs. Several of these clients reviewed their strategies at Engage 2015 and I am looking forward to discussing their progress, the challenges they have faced and the successes achieved in that time. It should be a thought-provoking session that will provide plenty of takeaways for any company undergoing or about to embark on a data governance program.

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