DATA GOVERNANCE LACKS BOARD-LEVEL SUPPORT
Financial institutions risk improperly managed data as 63% of industry executives say they do not consider data governance a board level issue
Research by QlikTech (NASDAQ: QLIK), a leader in user-driven Business Intelligence (BI), has found that, while data governance has become more important following the global financial crisis, over two thirds (63%) of financial industry executives do not consider it to be a Board-level issue. The study, conducted for QlikTech by Lepus, shows that one third (31%) of financial institutions do not have defined roles and responsibilities in the data governance space despite the many business drivers for data governance in the financial industry.
Combined with an unprecedented rise in the volumes of data being processed on a daily basis, a multitude of regulations relating to data management have been introduced, including Sarbanes-Oxley, SEC-17a, Basel III, Solvency II and BCBS 239 (Risk Data Aggregation). Financial institutions have had to establish standard practices with respect to data architecture and modelling for which data governance is a solution.
The research, which surveyed banks in Europe, North America and Asia-Pacific to explore data governance initiatives, highlights the need for Board-level representation and ownership to ensure that data governance frameworks meet the business objectives.
This is all the more important given that the survey also reveals multiple business drivers for data governance initiatives and different primary functions of a data governance framework. Achieving regulatory compliance and reducing regulatory risk was recognised by 94% of banking executives as a business driver, followed closely by ensuring data consistency across the enterprise (88%) and improving transparency of financial data and information (63%).
However, the primary function of a data governance framework varies markedly among the banks surveyed. While 44% of survey respondents placed reducing risk as a primary function and delivering business benefit as another, meeting regulations was only classed a primary function of a data governance framework by 13%.
“Given the many business drivers and responsibilities of a data governance function our research demonstrates, it’s especially important for data governance to have Board-level representation and ownership so it is managed, measured and implemented to meet the business’ agenda effectively,” says Duncan Ash, Director, FS Market Development, EMEA, at QlikTech. “Data governance has become more important following the global financial crisis as financial institutions have been forced to conduct comprehensive reviews of their data management strategies, but without the senior level representation and agreed objectives, it’s unlikely to have the desired effect or outcome on a bank.”
“Not only can data governance frameworks help financial institutions achieve regulatory compliance to reduce risk, it can also ensure purging of bad data. For banks to be profitable, they need accurate data,” Ash continues. “Even if data governance itself lacks Board-level representation, linking profit to data quality will warrant financial institutions taking notice of the need for a data governance framework at the highest level. CFOs need to be able to rely on a number to influence a decision and to have a certain level of confidence in that number – safe in the knowledge they can prove where it came from. With this reassurance they have the confidence to make better decisions and act upon information as soon as it becomes available.”
QlikTech provides user-driven Business Intelligence (BI) – Business Discovery – to companies and organisations globally across all markets and industries. QlikView Expressor helps financial services firms to take control of their data – to understand where it originated from, who has modified it and when, and to understand any formulae which have been applied to the data during its lifecycle. Over 2,500 financial services institutions rely on the QlikView platform, including all of the top 15 banks based in North America and Europe, because it empowers business users and decision-makers and provides access to on demand analysis, insights and business discovery.
To find out more download the report on Data Governance: Streamlining and Enriching Data Across the Organisation: bit.ly/1a713CT.
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QlikTech (NASDAQ: QLIK) reveals meaning in data so people can act on it. The QlikView Business Discovery software platform and Qlik Customer Success Framework provide the people, technology and services to help organizations progressively optimize how they use data as a strategic resource. QlikView uses Natural Analytics™ to support the way our human curiosity naturally searches and processes information, revealing insights and enabling decisions in the process. From small businesses to the largest global enterprises, QlikView gives users the immediate insights they need and IT professionals the enterprise manageability and governance they require. Headquartered in Radnor, Pennsylvania, QlikTech has offices around the world serving approximately 30,000 customers in over 100 countries.