CEO at Fencore
January 19, 2022
What is Data Governance?
Data governance means different things to different people. But most agree that it is an umbrella term for various disciplines — involving people, processes, and culture. This infographic describes one way to think of it:
Why it’s Important
Beginning data governance initiatives can appear a bit daunting. You’re establishing policies and strategies for data assets, and simultaneously raising the profile of data to treat it on par with buildings, employees, or intellectual property. Ultimately, this enables organizations to access the full value of data, the currency of today’s networked economy while protecting that data from risk. Data quality, data centralization and data mastering initiatives are booming as a result of rapid growth in data, demand, and regulation.
Effective data governance not only improves operational efficiency but also minimises risk. It’s crucial that the right people get the right information at the right time — both for their immediate purposes as well as in a way that works with the data framework of the whole organization. On the flip side, it’s also crucial that people who are not authorized to access information are prevented from doing so by having the right security policies in place.
Special Challenges in the Buy-side Industry
Why is it particularly important for the buy-side of the finance industry to have solid data governance strategies in place? There are several reasons:
- Ever-increasing demands from regulators around the world for data to be stored securely and accessible only to authenticated, authorized users.
- Spreadsheets use is still far too prevalent within the buy-side industry, where no audit trail or data traceability exists. Who changed what data and when? There has to be a clear answer to that question.
- Good investment decisions rely on good quality data. The old adage of “garbage in — garbage out” certainly applies and ultimately, having good data governance systems and controls in place will positively affect the bottom line.
Fit For the WFH Age
Data governance is more important than ever in the age of working from home: having the right access controls in place is a must. But on top of that, all changes to data should go through a four-eyes approval process (aka maker/checker process). By eliminating the route for a single rogue login to carry out undesirable updates to data, you raise the bar for data security across your organization.
Key Technology Features to Look For
When it comes to choosing the data governance and data management platform for your organization, there are some key considerations to make:
- Ownership of data can be assigned at the attribute level
- Data access control and permissioning is easy to set up and maintain
- Cloud-native architecture is in place to be future-proof
- 4-eyes approval can be turned on for your critical data sets
How to Execute the Strategy
Organizations increasingly need the leadership team to embed data management and governance capacity, tools, and processes across the operation — but lack the language to articulate the work or identify the right party to lead the process.
This is why so many buy-sides choose to engage a consultancy or specialist vendor in advising on the best data governance strategy. This outside view into the organization can lead to insights that would not be possible with internally executed initiatives. Joining ecosystems like DataQG can also be a big help by interacting with other members of the community who are often in the same position.