Why we need regulators to set the bar in Data Governance?
Imagine these two scenarios:
1) A kid who does not understand why she needs to go to school and gets into trouble all the time with their parents. Ultimately she goes to school because her parents “ask her to do so”.
2) A peer kid whom is mature enough to understand that education is important and whom sets herself a high standard, knows how much she wants to learn and where she wants to go.
Now picture yourself as a large regulated Financial Services institution with thousands of employees and transacting very large volumes of data - and perhaps with billions of dollars in assets.
Would you like to be like the kid in the first or second scenario?
It is often seen that Financial Institutions comply with Data Governance regulations (e.g BCBS-239 or GDPR) because a regulator “asks them to do so”; which sounds like the kid in the first scenario.
Those institutions would not move a finger or spend a dollar if there was no Data Governance legislation obliging them.
If your hypothetical Financial Institution was like the kid in the second scenario; your data would be sparkling clean because you know how much value you can get out of it as an asset. Let alone how great service you could provide to your customers and how you would be able to leave your competition behind, adding money to the bottom line and making your shareholders and even employees happy.
You understand well your Analytics and how important is to have reliable data; also you know that since your data is 100% reliable, your Data Scientists would not need to clean the data and they would dedicate their time on their Stats, Machine Learning, AI automation, Visualisations, etc. - as they should.
In the event that a regulator asks you to comply with data quality or data integrity, you would answer their request in no time and without spending any money. At the same time you wouldn’t be distracted from your strategy or objectives and could continue adding value to your business.
Unfortunately Data Governance is associated with red tape and not with renewable energy that propels businesses in a sustainable fashion. It is one of those things that is seen, due to a poor organisational culture or lack of education, as a problem and not as a solution.
With that in mind, Data Governance would require a major shift in the corporate mindset to succeed. In the mean time regulators will need to continue pulling the ears of those that are unlikely to comply.
Disclaimer: This document reflects the author’s personal views and not the views of the organisations where the author is or has been affiliated.