Key Principles Serve as Cornerstone to Successful Data Governance

Paul McInnis, Head of Enterprise Data Management, Data Management

A recent survey conducted in collaboration between Eagle Investment Systems and WatersTechnology revealed that while industry participants are feeling the pressure to put in place formalized data governance policies, these efforts largely remain at an impasse. A number of challenges, be they cultural or related to available resources, stand in the way. Anecdotally, however, we’ve found that in many cases, large organizations often don’t know where to begin when it comes to drafting a data governance policy.

The survey and its accompanying white paper, “Command and control: Establishing a formal data governance strategy,” can be found here.

The findings illustrate where the broader financial services market currently stands as it relates to data governance, as more than 80% of respondents believe their organizations recognize the value of data as an asset to their business. That said, only 35.8% currently have a mature data governance strategy in place, a fact that speaks to inherent challenges of implementing a rigorous policy. Moreover, 15.1% of respondents admit that they have lost a client due to inadequate governance, while 9.4% say their organization has suffered a security breach, highlighting the threats. Perhaps less severe, though no less important, nearly 60% reported operational inefficiencies due to the lack of a formal data governance framework, underscoring the lost opportunity costs.

While these threats and concerns are all recognized within organizations and atop them, adoption of formal governance policies remains slow. However, more than 40% call it an immediate priority and more than half of those respondents cited plans to introduce a formal strategy within the next 12 months.

The question remains: Where to begin? As highlighted in the white paper, success in data governance requires senior leadership to both advocate for and allocate the necessary resources to make it happen. Moreover, collaboration is critical, particularly between the business users and IT. This is one of the reasons the Chief Data Officer role has become more and more common throughout the industry, to both quarterback the implementation and then oversee the platform once live.

Finally, there are several principles that we’ve found that are universally evident in successful data governance strategies, and we’ve found that the most effective strategies should incorporate:

  • A comprehensive data model to aggregate multiple sources of complex investment data;
  • A well-defined business glossary to ensure consistency and use of business semantics;
  • Flexible error handling and data validation tools that enable exception-only workflow monitoring and that process information;
  • Powerful data quality monitoring tools to validate data based on business rules;
  • Traceability of data lineage from the point of integration through the point of consumption;
  • A robust and searchable data dictionary to manage technical definitions;
  • Agile auditing and analytical measurements on data quality and process workflows

While these themes may provide a primer, we will be going into much more depth in discussing how, exactly, to go about building a business case to set a data governance strategy in motion as part of an upcoming webinar. I’ll be joined by Prasad Malisetty, Director of Data Management and Reporting at Nationwide Investments and Jim Stitt, Head of Data Management at RBC Global Asset Management, two executives who have successfully designed, implemented and maintained data governance platforms at their respective organizations. The free webinar, Best practices for implementing and monitoring your data governance strategy, takes place on Wednesday, September 30th, at 10am EST, (3pm BST). It may be great place to start for those seeking a springboard.

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