72% of business leaders say data volume and their distrust of data has stopped them from making a decision. That may be a very familiar scenario to leaders in financial services, where data is particularly plentiful, and decisions are highly consequential. In order to make data volume a benefit and not a hindrance, and to make the data itself an asset and not a liability, you need robust Data Governance. In an Agile Solutions survey of Financial Services data leaders, 50% said lack of Data Governance was the biggest barrier to transformation projects in their business.
So what is Data Governance, how do you apply it, and what is its impact in Financial Services?
What is Data Governance?
In short, Data Governance ensures that data is secure, accurate, available and usable, wherever it is stored and however it is used. It starts by posing a series of questions including:
- How do we source, structure and store our data?
- How accessible is our data and who should access it?
- Is our data clean, and if not, how do we improve and maintain the cleanliness?
Then, it applies a framework that keeps data usable, accessible, and protected, with rules for data storage, data responsibility, and data stewardship.
Data Governance is a principle, a habit, and an ongoing practice — not a project.
Data Governance improves Know Your Customer (KYC) processes
Since KYC depends on accurately and up to date customer information, Data Governance supports a reliable process by protecting the consistency of data. It also improves the efficiency of KYC by enabling more detail in the data and storing and presenting it consistently and accessibly. That accessibility is of course a regulatory requirement as well as an operational advantage.
From the customer’s perspective KYC will then improve too. Accurate and accessible data makes the processes quicker, and less demanding or frustrating for the client. That means better customer satisfaction, and lower chances of losing opportunities to competitors because of an intolerably long KYC process.
Data Governance improves customer experience in Financial Services
If a bank improves its customer experience score by just 10%, it can expect 27.5% higher growth, and Data Governance will enhance any initiative or process that improves customer experience.
- Marketing and communication: better customer data means messaging that is timelier and more relevant, boosting customer acquisition, retention, and spend
- Customer service teams have access to more and better data, which means they have vital context for customer interaction, meaning they have to ask fewer questions, resolutions are quicker, and customers are less frustrated. Governance also supports AI and automated customer service (e.g. chatbots) by providing the AI models with that same data
- Richer and more reliable data powers personalisation, so an experience can be more tailored and satisfactory, with better recommendations and customer journeys
Data Governance is the foundation for safe, effective, compliant AI in Financial Services
In 2023, Financial Services collectively spent around $35 billion on AI, yet in our survey of Financial Services data leaders, 90% described their relationship with AI as ‘early-stage’.
One respondent confirmed the appetite for AI, mingled with caution: ‘We’re all treading carefully and keep asking ourselves, “When can we take the stabilisers off?”’ Another express the anxiety associated with unsafe AI: ‘We want to be absolutely sure [that AI is safe], because one minor slip-up can have big ramifications. Who wants to be a trailblazer?’ Another acknowledged that “It all comes down to the foundations, and making sure you've got the right Data Governance in place. You have to structure data in the right way and manage it properly.”
Training Data is one of the foundations of AI, and Data Governance ensures that the data you feed your AI model is rich, accurate, and comprehensive enough to create desirable, commercial, and compliant artificial intelligence outputs.
How to introduce better Data Governance in your financial organisation
Financial businesses cannot improve their Data Governance simply by buying technology or upgrading their data platforms. Rather, those tools empower the business’s vision and strategy as part of emerging or strengthening data culture.
Agile Solutions can help you at every stage of the Data Governance journey — from establishing your Data Strategy, to the selection of the right solutions, to the implementation of your chosen technology.
Our approach covers the four pillars of any digital project: people, process, data, and technology.
With a constant eye on the commercial objectives, we analyse your business processes to identify where governance is a priority. We then outline the roles and responsibilities of every person accountable for it — considering data literacy, current capabilities and knowledge, future vision, processes, and technologies to implement the correct, scalable support that can elevate confidence across the board.
To start your path to transformation, get in touch today.
Further reading
Downloadable guide to Data Governance
A one-page explanation of Data Governance Principles and Processes
How a bank used Data Governance and Master Data Management to streamline compliance