Bank CDOs: How To Make Your Data Governance Initiatives Bankable

New technology trends are buzzing in (and even fading out) fast these days, as firms wrap their heads around the likes of artificial intelligence and machine learning and blockchain. But the underlying paradigm shift is now universally noticed and understood: data has exploded in volume and quality, and the current wave of technology is all about harnessing it.

Banks are generating huge volumes of data that must be properly maintained in accordance with many new regulations—but many banks are still working to implement the eleven principles of effective risk data aggregation and risk reporting introduced by the Basel Committee on Banking Supervision (BCBS 239), effective since February 2016. Frankly, many banks are facing a data overload and are unable to structure and outfit it in a meaningful way. They are feeling the lack of proper governance or data management systems, intensified by increasing customer and regulatory demands for more and granular information.

Thus, the task before banks is not about tweaking their systems to tick boxes on a compliance form. It's about transforming their entire approach to data in order to be secure, compliant, flexible, inventive, and forward-leaping—all at the same time, and all while technology is advancing at breakneck speed.

The first pages of a long book

It is, unquestionably, a lot. Where to begin? As with anything, the basics come first: deciding whom changes should be driven by. As data is in the realm of information technology, many assume that the IT department should be the central initiator—but this is not the case. This is far bigger than IT. It involves many different organisational functions whose backbones are data, like risk and finance, as well as revenue-generating departments like wealth management, client relationship management, and marketing. Thus, the mandate should come from the top, given the strategic aspects to coordinate both in terms of internal workings and external competitiveness. Many banks have hired Chief Data Officers (CDOs), whose responsibilities are to establish a "know your data" culture within the bank and to carry changes going forward.

Another basic: proper data governance must be established. With the help of the CDO, banks should implement a coherent and consistent framework across the entire organisation defining how data is to be managed. This framework should establish data ownership and stewardship as concepts, define the data and information...