Research by QlikTech (NASDAQ: QLIK), a leader in user-driven Business Intelligence (BI), has found that, while data governance has become more important following the global financial crisis, nearly two thirds (63%) of financial industry executives do not consider it to be a board-level issue. The study, conducted for QlikTech by Lepus, shows that nearly one third (31%) of financial institutions do not have defined roles and responsibilities in the data governance space despite the many business drivers for data governance in the financial industry.
Combined with an unprecedented rise in the volumes of data being processed on a daily basis, a multitude of regulations relating to data management have been introduced, including Sarbanes-Oxley, SEC-17a, Basel III, Solvency II and BCBS 239 (Risk Data Aggregation). Financial institutions have had to establish standard practices with respect to data architecture and modelling for which data governance is a solution.
The research, which surveyed banks in Europe, North America and Asia-Pacific to explore data governance initiatives, highlights the need for board-level representation and ownership to ensure that data governance frameworks meet the business objectives.
This is all the more important given that the survey also reveals multiple business drivers for data governance initiatives and different primary functions of a data governance framework. Achieving regulatory compliance and reducing regulatory risk was recognized by 94% of banking executives as a business driver, followed closely by ensuring data consistency across the enterprise (88%) and improving transparency of financial data and information (63%).However, the primary function of a data governance framework varies markedly among the banks surveyed. While 44% of survey respondents placed reducing risk as a primary function and delivering business benefit as another, meeting regulations was only classed a primary function of a data governance framework by 13%. “Given the many business drivers and responsibilities of a data governance function our research demonstrates, it’s especially important for data governance to have board-level representation and ownership so it is managed, measured and implemented to meet the business’ agenda effectively,” says Paul Van Siclen, Director of Market Development for Financial Services at QlikTech. “Data governance has become more important following the global financial crisis as financial institutions have been forced to conduct comprehensive reviews of their data management strategies, but without the senior level representation and agreed objectives, it’s unlikely to have the desired effect or outcome on a bank.”