According to the 1966 musical Cabaret, ‘money makes the world go around’. But in 2023, it could be argued that data is just as pivotal to the earth's rotation.
This is especially pertinent when you consider that every financial services company depends on data.
That’s why it’s so important to have a robust data strategy and effective data governance in financial services. You need confidence in the quality, security, and consistency of your data across the company.
On top of the business benefits, you also have to be careful to adhere strictly to the rules and regulations around data.
Although GDPR technically only applies to Europe, many organizations have customers protected by the regulation, and fines have reached as much as $877 million.
In this article, we will cover:
What is Data Governance in Financial Services?Want to know your organization’s data maturity. Download our free Data Maturity Assessment. The questionnaire includes an in-depth assessment of your organization’s data maturity with immediate results
Data governance can mean different things depending on what your industry is, and what your priorities are. But at a high level, this is how we define it:
"Data governance is the process of organizing, securing, managing, and presenting data using methods and technologies that ensure it remains correct, consistent, and accessible to verified users."
In the context of financial services, it’s the management, control, and access of financial data. It involves creating policies and procedures for data collection, storage, processing, analysis, and sharing.
The goal of data governance is to ensure that the data used by these companies is accurate, consistent, and secure, while complying with regulatory requirements.
Effective data governance frameworks for banks enable informed decision-making, improved operations, and better customer experiences.
Data governance is vital in the financial services industry for several reasons.
Firstly, it ensures the accuracy and consistency of financial data, promoting transparency, accountability, and compliance with regulatory requirements.
With the vast amount of data generated in this industry, maintaining consistency can be difficult, especially when working with multiple data sources across departments.
For example, calculating average transaction time across various branches can be challenging when different calculation methods are used.
A well-defined data governance framework for banks provides structure for managing financial data throughout its lifecycle from collection to reporting.
Without it, financial institutions can’t make reliable, data-driven decisions.
It also ensures secure and compliant data management, limiting access to sensitive information only to authorized personnel. This is increasingly important with laws like GDPR, GLBA, and BCBS 239 holding companies accountable for data privacy.
Implementing data governance in financial services leads to more consistent metrics and reporting across the organization.
Reliable, standardized data ensures better decision-making, cost efficiency, and higher customer satisfaction.
Key benefits include:
Ultimately, data governance builds trust at the foundation of every financial relationship.
By establishing clear processes for collecting, storing, and using data, companies protect both themselves and their customers from regulatory and reputational risks.
Related: Data Governance: What, Why, Who & How. A practical guide with examples
Ensuring data integrity in financial services comes with its own set of challenges.
Some of the most common data governance challenges in financial services include:
Overcoming these challenges requires a strategic approach, combining technology, processes, and strong data stewardship.
Robust data governance practices are crucial to overcoming these challenges and ensuring data integrity in financial services.
Here are some data governance best practices in financial services to follow:
By adopting these best practices and implementing a data governance framework for banks, organizations can maintain data integrity, meet compliance standards, and enhance overall operational resilience.
Creating effective data governance in financial services involves a few essential steps:
Using a data catalog tool is one of the most efficient methods. Identify all your data sources and gather metadata in one central repository.
Once organized, you can explore and analyze it to uncover deeper insights.
You can read more in our Building a Business Glossary article, but here’s a summary of our business glossary process:
Compliance with data privacy regulation and internal policies is critical.
Financial organizations must take a proactive stance on data security, implementing data governance best practices in financial services to avoid breaches.
Provide ongoing employee training and perform regular audits to stay aligned with changing regulations.
After the data is organized and secure, assign ownership so the right people can update metadata, data quality management, and build relationships between datasets.
Data governance is a shared responsibility, not limited to one team.
In a highly regulated sector, reporting must be detailed and accurate.
Whether under GDPR, BCBS 239, or GLBA, effective data governance frameworks streamline compliance and reporting efficiency.
Related: 3 Data Privacy Compliance Challenges that can be solved with OvalEdge
OvalEdge is a Data Governance platform designed for financial services companies. It provides tools to solve financial data governance problems on a larger scale.
Here’s how we help:
Before you can do anything else, you must gather your data from across all your data sources. At OvalEdge, we do this with the Data Catalog.
The data catalog provides access to all your data sources in one place, no matter where they are. It serves as the foundation for everything else in this process.
OvalEdge will also automatically classify your data, so it’s easy to identify PII, confidential data, etc. This helps you to apply the right set of policies for your company and meet financial regulations.
Next, you’ll standardize your data using our business glossary feature. A business glossary is a list of terms and definitions organized in a clear and accessible way.
This allows anyone within the company to access and discuss the financial data in a standardized and understandable way.
After standardizing your data, the next step is to classify and tag it. This allows you to create connections between different data, regardless of where it is stored.
The next step is to secure your data using our Data Access Management tools.
You can manage access to all your data centrally, ensuring that only the right people have access to sensitive patient data.
You can also create strong data access policies to ensure compliance with important regulations such as BCBS 239 and GDPR.
Once your data is organized and secure, it is critical to inform everyone that they have access to the necessary data.
All organization personnel should then receive training and be encouraged to use OvalEdge regularly. This will simplify their work and enhance decision-making abilities.
This includes data literacy, data discovery, and integrating with other tools that their team or department uses.
Finally, it is important to have processes in place that allow you to efficiently manage your data.
People need to take ownership and manage the metadata, as outlined in this step-by-step guide on metadata management. This involves developing policies and procedures, utilizing tools, and manually curating metadata.
Your team can also use our auto lineage tools to help them understand where the data comes from and where it goes. This is essential for remaining compliant, as they can answer any questions regarding the lineage of the financial data.
These features will ensure that your financial data remains consistent and accessible across your financial organization, while remaining compliant.
OvalEdge ensures that your data governance framework for banks remains consistent, transparent, and compliant across the organization.
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