What is Data Governance?
Before we can discuss data governance, we need to define it.
At DTSQUARED we align to the data governance definition set out by the EDM Council : data governance is the process of establishing the policies, controls, standards, and rules you need to govern one of your company’s most important assets. Identifying critical data and assigning ownership of that data is key to building a data governance framework.
Data governance establishes the rules of engagement. It lays down the guidelines for how data is acquired, persisted, distributed, appropriately and ethically used, archived and/or defensibly destroyed.
It is through strong governance that data will become organised, visible and fit for purpose. Organisations are accountable for their data and looking after it effectively and meeting regulatory standards is core to this accountability.
What are the key benefits of Data Governance?
Dealing with vast amounts of data can be a struggle. A strong data governance framework helps to make sure that your data is controlled and easily accessible. Good data governance means that you know where that data has come from, where it is going, what it means, whether you can trust it and where to find it when you need it. It is much easier to grant access to information when you have defined the roles and responsibilities around that data and when it is stored centrally for immediate access.
An important role of Data Governance is to create the standards by which data is identified, defined, used and destroyed. At DTSQUARED, our team of data consultants understand how important it is for businesses to have a common understanding of, and speak a common language about, their data. One of the major problems faced by enterprises is often the inability to communicate effectively either with technology or another business or division within the group (where there are numerous subsidiaries under the umbrella of a controlling parent company). Using a central repository can resolve this.
One of the largest and the oldest benefits of Data Governance is regulatory compliance. Whether you are talking about EU GDPR (General Data Protection Regulation) or Regulation BCBS239 (The Basel Committee on Banking Supervision Principles for Effective Risk Data Aggregation and Risk Reporting) or Solvency II (framework for a solvency and supervisory regime for insurers and reinsurers in the EU), each have Data Governance requirements baked in. In addition, the Personal Information Protection Law of the People’s Republic of China (PIPL) will take effect on 1 November 2021 and is the country’s first legislation dedicated to protecting personal information. (More to come on this in a future blog, sign up here to find out more).
But there’s a lot more to data governance than simply compliance and at DTSQUARED, we see the future as using this framework to achieve new reporting insights, which will lead to greater business progress and an improved return on investment. Creating a common business language, raising the visibility of your data and storing the metadata in a central repository will allow your information to be used in a whole host of new and exciting ways. Data governance makes data assets useable and easier to connect to business outcomes.
Data Governance also brings a human dimension into a highly automated, data-driven world. It establishes best practices, making sure that concerns and needs beyond traditional data and technology areas – including areas such as legal, security and compliance – are addressed consistently.
What are the challenges of Data Governance?
For every problem there is a solution. At DTSQUARED we know that data is ever more important in reaching business decisions and creating a strong data governance framework is crucial to future success. Establishing a robust data catalogue will also fuel new reporting insights and in turn increase returns, whilst a Business Glossary will facilitate a common understanding of data meaning.
To achieve this, we can help you decide how best to implement controls and apply standards to your data and define clear data ownership. We can support you in making sure that technology governance and data governance are each aligned and that a common language is used for both.
We discuss below (‘Why is Data Governance important in financial services?’) how critical data needs to be prioritised and governed within your organisation. At DTSQUARED, our skilled business analysts can help you to identify prioritised data within your governance framework. Financial institutions may find that critical data elements require heightened levels of protection and controls.
Why is Data Governance important in financial services?
This is almost a rhetorical question, as data governance for financial services is usually a regulatory requirement. Many of these regulations are there to raise the visibility of the data, to make sure that the data lineage is strong and to ensure that the quality is monitored and controlled. Strictly speaking, it is not the job of data governance to monitor data quality, but it is governance’s role to set the standards by which the data is held up for scrutiny.
Critical data is hugely important in data governance and refers to important pieces of data that are used to run the business, manage risks, deliver products and services. The data governance team sets the criteria by which you are going to determine the criticality of data. You define within your business a subset of data that is considered critical to your success. You do this because you want to immediately build protections around this critical data to make sure it remains of the highest quality. At DTSQUARED we know that identifying and protecting critical data is of particular importance to financial institutions.
To be clear, your data governance framework is responsible for building the approaches by which data is prioritised and critical data identified.
What to consider when planning your Data Governance framework
As the saying goes, you need to know where you’re coming from to know where you’re going to. You must first identify what is driving your decisions when planning a data governance framework because that framework will differ depending on its purpose. Your business might be driven by regulatory compliance, or it might be driven by a desire for greater insights without the burden of regulations.
After you’ve identified what is driving your decision making, look at the capabilities you wish to explore to support that. It may be that you want to raise the visibility of your data, that you want to catalogue the data in your systems or that you want to build a new type of reporting database. In each case you first need to define what is driving your data governance requirements and then make sure that they are supported by capabilities you will rely upon in the future.
Whichever path you choose to follow you need to begin with a data maturity assessment and a full business analysis, and our team of trained and experienced data consultants at DTSQUARED are here to support you at every stage of this journey. To get in touch, please click here, we would be delighted to speak to you.