6 min read
In the landscape of financial industries, where data is a cornerstone for decision-making and regulatory compliance, the significance of data quality and governance cannot be understated. The Equifax incident in 2017 underscored the dire consequences of inadequate cybersecurity and data governance, affecting 147 million consumers. Such events require a shift in strategy beyond mere data management towards a comprehensive data governance approach, enhancing protection for sensitive information and driving superior customer experiences.
Not to mention the financial impact of bad data, 2017’s breach at Equifax exposed the personal information of 147 million people and in 2019, Capital One was hacked compromising 100 million customer accounts. These are only two of many high-profile examples of fallout from data failures.
Such incidents alert the industry that the way we manage and protect data needs a fundamental overhaul.
For financial institutions like banks, insurance companies, real estate brokers, real estate investment trusts (REITs), data fuels decision-making, customer trust, and compliance with increasingly stringent regulations.
THE IMPORTANCE OF GOVERNANCE AND QUALITY
Data governance in banking today is multifaceted, prioritizing a balance between technology, people, and processes to form a robust foundation. Banks must invest not just in technology, but also in establishing clear data governance frameworks outlining stakeholder roles, responsibilities, and clear policies. A strong data governance strategy will protect sensitive data from both internal and external threats. However, when considering a governance technology, consider important factors like real-time alerts so your team can act fast when an alert is received.
A 2016 study by IBM showed that $3.1 trillion is lost annually in the United States alone, due to bad data. Some of the main causes of lost revenue are lower productivity, system outages caused by data related crashes and downtime, and higher maintenance costs. In the financial industry specifically, bad data can critically impact risk management decisions and lead to things like making poor investments or lending to poorly qualified candidates.
Quality data can also make or break effective decision-making in the financial industry. Banks and other financial businesses need to enforce stringent data quality controls, involving regular monitoring and validation to rectify discrepancies. Quality data is the first step, automating these processes with real-time alerts will take your data quality to the next level and giving you a single-source of truth that everyone in the business can trust.
DATA SECURITY AND COMPLIANCE
Security and privacy in banking data governance are no less important, you must also take robust measures to protect sensitive information and comply with stringent regulatory standards. This includes implementing encryption, access controls, and regular review of policies and procedures. While most financial institutions have many of these controls in place already, they are often controlled by several disconnected tools and managed by various teams. Unifying this into a holistic solution makes it much easier for the entire business to trust in the controls that are in place.
Regulatory compliance is an evolving challenge. Staying abreast of changes in laws like GDPR, PCI DSS, SOX, and Basel III is crucial for avoiding legal and reputational risks. Compliance is vital for safeguarding sensitive customer information and solidifying trust. You should be aware of the tools you have in place to monitor these guidelines and how often they are updated and controlled. Ensuring compliance is another one of the many reasons having a unified solution makes it all this easier to manage.
Fines like GDPR non-compliance can reach up to 4% of the annual revenue or €20 million, whichever is greater. Three of the biggest GDPR fines include Meta's €1.2 billion fine in Ireland, Amazon's €746 million fine in Luxembourg and Meta's €405 million fine in Ireland.
The foundation of effective data governance lies in understanding and applying regulatory best practices, ensuring the entire organization, from C-suite executives to department heads, is aligned in its implementation. But a significant challenge remains in conveying the importance of data governance to decision-makers who are often away from the operational side of data management.
TAKING CONTROL OF YOUR DATA
The solution is building a compelling business case that links data governance directly to tangible benefits like increased revenue, enhanced productivity, and improved customer satisfaction. Implementing data governance tools like metadata capture and data mapping can streamline data analysis, accelerate project turnaround, and enhance market competitiveness through faster product launches. In fact, improving data set accuracy even by 10% can boost marketing ROI, allowing for more efficient campaign spend and higher conversion rates which leads to revenue increase. Consolidating customer account data reduces service times and operational costs, which improves customer satisfaction and potentially increases cross-selling opportunities.
Innovations such as the rise of the Data Protection Officer (DPO) role, proactive data governance approaches, and investments in specialized governance tools show the industry's shift towards more sophisticated data management practices. Practices that also result in boosting stakeholder trust and gaining a competitive edge. But the challenges persist, particularly concerning security risks and the complexity of managing data across disparate systems and regulatory environments.
An effective data governance framework will amplify several additional benefits for your business:
Data Quality Improvement: It ensures data accuracy, aiding in informed decision-making and operational efficiency. Elevated data governance goes beyond data accuracy.
It encapsulates the entirety of data's lifecycle, ensuring its reliability from acquisition through analysis to application. Informed decision-making hinges on this foundation of data integrity, pushing towards operational excellence and strategic advantage.
Increased Trust and Confidence: Robust data governance boosts stakeholder trust and showcases the institution's commitment to data security. A meticulously governed data ecosystem reinforces stakeholder confidence and exemplifies an institution's dedication to safeguarding sensitive information. This commitment is crucial in the digital age where data breaches are not just breaches of security but breaches of trust.
Enhanced Internal Compliance: It ensures adherence to regulations, fostering a responsible data management culture.
Adherence to all the regulations is non-negotiable in the financial domain. Data governance ensures that every data touchpoint conforms to legal standards that embeds a culture of accountability and responsibility within the institution.
Competitive Advantage: Effective data use can reveal new opportunities and drive innovation, giving banks a competitive edge.
The strategic utilization of data underpinned by a solid governance framework can lead to innovations, uncovering opportunities previously covered by the swamp of unstructured data.
There is a need for a unified solution that simplifies data governance for financial institutions. A tool that offers pre-built rules and smart troubleshooting to streamline processes and ensures regulatory compliance. A tool that automates data profiling and monitoring, allowing for the early detection of quality issues that could lead to security vulnerabilities or compliance breaches.
Exmon: A Unified Data Governance and Quality Solution
For financial institutions aiming to refine their data governance practices, Exmon by TimeXtender offers an integrated suite of tools designed to fortify data governance strategies. It simplifies data governance with its user-friendly platform and helps institutes navigate through the complexities of the financial sector.
Exmon's data governance and quality tools significantly enhances the protection of sensitive data by focusing on several critical aspects:
Automated Data Profiling and Monitoring
Exmon can automatically scan and profile financial data to detect any quality issues, such as inaccuracies, inconsistencies, or incomplete information. By identifying these issues early on, Exmon helps prevent the use of poor-quality data, which could lead to security vulnerabilities or compliance issues.
Exmon's excels in autonomously scrutinizing financial data, identifying discrepancies that could compromise security or compliance. Early detection facilitates proactive remediation, strengthening the institution's defensive measures against potential threats.
Data Cleansing and Validation
After profiling data, Exmon allows for the automated cleansing and correction of data quality issues. It can remove or correct duplicates, outliers, and errors. This ensures that the data used in decision-making and reporting is accurate, thus reducing the risk of breaches caused by incorrect data handling.
Beyond detection, Exmon automates the rectification process, purging or amending flawed data entries. This automation ensures that data utilized across decision-making frameworks is pristine, mitigating risks associated with data inaccuracies.
Data Enrichment
Exmon can enhance existing financial data by integrating additional details from external, reputable sources. This enriched data provides a more comprehensive view, which is crucial for sensitive data handling, ensuring that all relevant information is considered in governance and security protocols.
By combining external datasets with existing financial data, Exmon offers a more nuanced understanding, crucial for managing sensitive information.
Rule-Based Validation
In finance, certain data must meet specific quality standards. Exmon enables the creation of custom rules to validate data against predefined criteria, ensuring compliance with internal data governance policies and external regulations.
Exmon's customizable rule-setting feature allows institutions to enforce specific data quality benchmarks, ensuring compliance with both internal policies and external regulatory demands.
Intelligent Alerts and Notifications
To maintain data quality and governance standards, Exmon can be configured to send automatic alerts when data anomalies or issues are detected. This enables rapid response to potential data quality or security concerns, mitigating the risks associated with sensitive data breaches.
The system's ability to dispatch automated alerts upon detecting anomalies is vital in maintaining stringent data quality and governance standards. These alerts accelerate immediate remedial actions while minimizing exposure to risks associated with data breaches.
Data Governance Framework
Exmon supports the establishment of a comprehensive data governance framework, detailing how sensitive financial data should be handled, accessed, and protected. This includes defining clear roles and responsibilities for data stewards and outlining processes for data use and sharing, which enhances data protection.
Compliance Assurance
Financial institutions must adhere to various regulations, such as GDPR, PCI DSS, and others, which mandate strict data security and privacy measures. Exmon's governance tools help ensure that sensitive data is managed in full compliance with these standards, thus protecting against regulatory penalties and reputational damage.
Access Control and Security Policies
Exmon allows for the implementation of robust access controls, ensuring that only authorized personnel have access to sensitive data. This reduces the risk of unauthorized data exposure or leakage.
Implementing stringent access controls via Exmon minimizes the risk of unauthorized data exposure. By ensuring that only authorized personnel can access sensitive data, financial institutions can significantly reduce the vulnerability to data leaks.
By providing these functionalities, Exmon enables financial institutions to improve the integrity and security of their sensitive data, which is essential for maintaining trust, ensuring regulatory compliance, and protecting against financial and reputational harm due to data breaches.
If you're looking to strengthen your organization's data defenses and streamline your data governance processes, we invite you to see Exmon in action. Schedule a personal demo to witness firsthand the power of Exmon's data governance and quality tools. Or, if you’re ready to take the next step towards securing your data, visit our pricing page to find the best plan for your organization's unique needs. Don't let your data be an afterthought—make it your advantage with Exmon.
TL; DR
Financial institutions face critical data challenges, including maintaining data accuracy, adhering to stringent compliance regulations, and protecting sensitive customer information. Exmon addresses these issues by offering a robust suite of tools for automated data monitoring, cleansing, and governance, ensuring data integrity and security. Take the first step towards resolving your data dilemmas—schedule a personal demo or visit our pricing page to learn how Exmon can help safeguard and manage your financial data efficiently.