Author: Sharad Varshney, CEO OvalEdge
Data governance has the power to transform organizations in every sector. However, one of the most significant industries where data governance has, and continues to make, a considerable impact is in finance.
In fact, one of the core principles of data governance, compliance, was born out of regulations developed by the banking industry. Today, data governance is still critical in the finance sector.
1. Supporting regulatory compliance
Compliance is perhaps the most significant benefit of data governance to financial institutions. As finance professionals know, adhering to strict data privacy and responsible banking regulations can be a full-time job.
Securing customer data is a cornerstone of compliance, and data governance makes this responsibility straightforward. Data governance policies are enforced through automated data governance tools.
Essentially, a data governance tool will scan all of your data sources on the hunt for PII and other confidential data. Once found, this data is flagged and catalogued. When you know where your sensitive data is, you can monitor how it is used and determine who can access it.
2. Cutting costs across your organization
Manually managing the data in your organization is not just slow and inefficient, but it’s expensive. Usually, responsibility for data management is handed over to IT teams. And maintaining an active IT team incurs considerable costs.
When IT professionals are tasked with finding data, granting access to data manually, and ensuring security, they can’t focus on other tasks. In many cases, these tasks involve streamlining processes, improving infrastructure, and ensuring organizations stay ahead, technically, of the competition.
Data governance processes take this burden away from IT teams and centralize technologies, eliminating the need for multiple expensive third-party systems. Primarily, these savings are made through the provision of self-service, where users are provided with a secure method to find and access data for analysis.
3. Providing market insights
The finance industry is becoming increasingly competitive. Today, traditional institutions come up against innovative, digital-finance-focused alternatives, while newcomers face a highly saturated market.
Financial organizations must turn to market insights to gain a competitive edge. Data analysis is the most effective way to gain this insight, and data governance enables cross-company analysis.
Data governance processes ensure data is easily accessible and well-organized. Essentially, ready for analysis. Although identifying market trends is primarily the role of leadership teams, anyone in an organization can utilize company data to innovate.
4. Ensuring data quality
Even if data access and analysis are thriving in an organization, the data used in analytics is useless unless it is high quality. When data is compromised, it can’t provide you with the essential accuracy required to make meaningful reports.
In the finance industry, this is critical. Without guaranteeing the integrity of financial reporting and forecasting, you can’t use the data in your care. Why? Because the fallout from inaccurate reporting can be very costly and potentially see your organization face legal proceedings.
Data governance enables you to measure, assess, and fix data quality issues. Using a data governance tool, you can automate data quality protocols and data lineage tracking. Beyond this, you can introduce procedures that ensure data quality is managed in every part of your organization.
5. Introducing a data-driven culture
Ultimately, for you to achieve the level of innovation supported by data analysis, you need to implement a cultural shift in your organization. In every sector, data has the potential to transform how companies do business.
However, in finance, data innovations provide a much-needed competitive edge and getting the edge with data insights is crucial to success. Not only can you use data to determine where companies can make savings and streamline processes, but you can gather critical customer insights that govern the direction of your company based on tangible predictions.
Data governance ensures these insights are accessible, secure, and easily analyzed. Essentially, data governance provisions ensure that data-driven innovation is not only encouraged but supported. In short, data governance facilitates a data-first culture in your company. And, when verifiable data is at the heart of all business decisions, you can rest assured they are both accurate and intelligent.
There is no single use case for data governance in finance that trumps the rest. Data governance is comprehensive, connected, and ultimately a full-circle approach. When it comes to implementation, it is best to observe and measure success collectively, incorporating all your pain points and reflecting on how your governance initiative has addressed or overcome them.
What’s more, data governance is a continuous, organic, and fluid process. This means that your data governance strategy will also evolve as your company does. It isn’t a rigid business practice and can be adapted to external and internal circumstances.
For example, suppose you decided to adopt a remote-first approach to staffing. In that case, you can tweak your data governance processes to ensure that the various new data sources are validated and secure. Or, if market conditions require you to reappraise your business model, you might decide to remove data access from certain departments. At the same time, you can rework your data strategy at the C-suite level.