Strong Data Governance is the Foundation for Regulatory Compliance, Says Deloitte

An effective data governance structure is crucial if firms are to make the improvements in data quality management needed to meet the regulatory requirements being imposed on the financial services industry (FSI), says a new Insights paper by Deloitte.

Data has become a key regulatory asset, as stricter regulations call for more detailed and frequent finance and risk information. In response, financial institutions are under pressure to ensure they have complete, timely, accurate and granular data to support their regulatory reporting disclosures.

“This more ‘data driven’ approach from regulators imposes a significant burden on the FSI, as the required data is not always available at the right granularity or doesn’t meet the required data quality standards,” notes Deloitte.

To ensure access to the high quality data required, Deloitte says it is imperative firms “properly embed a Data Governance structure” organization-wide that can provide more control over and insight into the institution’s data, and thereby support the necessary improvements in data quality management. Equally important is that it also increases organizations’ “responsiveness to new business opportunities as strategic decisions are based on improved data.”

Essentials of good data governance

Faced with an ever-expanding volume of diverse and complex data from a growing number of originators, many firms are struggling though to monitor and control data usage within their organizations. At the same time, industry participants are under intense commercial pressure to improve transparency, reduce costs and increase efficiency.

To cope with these dual regulatory and commercial demands, firms need a sophisticated data governance infrastructure that can enhance:

  • Usage management – by controlling the acquisition of data, its use and decommissioning as needs change, investment managers can more accurately align data usage with business needs, while improving cost management.
  • Management information – providing detailed business intelligence on data use helps support effective decision making and data governance programs.
  • Compliance management – ensuring greater data transparency, and that its use is in line with all guidelines and restrictions, is crucial to complying with the expanding raft of client reporting and regulatory obligations.

Deloitte will be presenting at the RIMES Seminar: EU Benchmark Regulation, Preparing for the Buy-Side Challenges in London on 9th June, 2016. Agenda & Registration.

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