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Articles by Barney Walker

The theory, reality and somewhere in between.

Posted by Barney Walker on 23 May 2017
The theory, reality and somewhere in between.

Big, small, old, new, structured, unstructured, invaluable and downright annoying data all form part of our daily lives whether we like it or not. Organisations thrive on it and we generate heaps of it every day. (I’m doing it right now even as I stand on the platform looking at the apologetic data that is predicting a delayed train).

Data helps us make informed decisions and has become key to our daily lives. Organisations exist because of its creation, storage and accessibility. Financial organisations rely on it to make informed decisions about investments, risk, budgets, profitability and trends.

Control and quality of this data is becoming key to ensure that these decisions are based on reality and not some random element or “informed opinion”. As the importance of data grows, the governments of the world are waking up to the importance of data ownership and accuracy. Especially where that accuracy can impact their voters’ decision making!
As you’d expect, organisations who weathered the financial storm of the recession and the ensuing blizzard of regulation are now fully aware of the importance of accurate source data that generates risk metrics. Risk committees opine on these metrics to make informed and auditable decisions.

So all is well with the world and we can sleep easily in our beds knowing our savings have capital adequacy protection and liquidity rules which ensure we can withdraw our cash whenever we want.

The reality is somewhat different though. The theory of implementing controls and having appropriate risk metrics sounds just peachy, however, they are only as good as the data that makes up the metrics and the business has to buy into this and not just nod wisely and agree.

All businesses (with a few exceptions) are in the business of making money for their shareholders. So additional controls around their ability to transact, especially ones that don’t appear to add tangible business value, are not embraced positively by the management and workforce. They’re an added overhead and an obstacle to their daily lives.

This means that we have two parties, business and risk, living under the same roof with the same paymaster but viewing the world through different lenses. How do we get them to work together so that they happily disappear over the horizon arm in arm?

Kinaesis works with many organisations to find a middle ground that satisfies both parties without destabilising what either is trying to achieve. Appropriate checks and balances are adopted which provide desired protection but also allow the business to operate freely and expand.

There is no “one size fits all” easy solution but implementing a structured methodology into the organisation ensures that constant improvement is delivered across the board.
To drive business adoption, it is important to balance the “push” and “pull” factors. Data governance and control are esoteric subjects to most people with cryptic justifications and benefits at best.

The initial “push” is to ensure data management controls are strongly embraced as a primary first line of defence responsibility. Practically this means leveraging existing control frameworks including adding specific data management principles and measures into risk appetite statements, risk culture statements and divisional objectives.

The “pull” of delivering real business value will gain traction by following some core do’s and don’ts:

• Don’t treat data governance as a stand-alone, specialist function ->
Do embed practices into day-to-day operations that bring you continual improvements

• Don’t target a mythical static end state ->
Do plan for things to change and put data governance capability at its core

• Don’t just focus on a set of simplistic key data terms and measures ->
Do measure the impact of data issues and use the results to drive priorities

• Don’t invest in tick-the-box static documentation that is past its sell by date on publication -> Do build a sustainable, open data knowledge base that supports and accelerates change

We ensure that the business has bought into these “controls” and then we implement a data governance strategy that is part of their everyday life. This gives the risk committees comfort that their metrics are correct and current. The business accepts a degree of oversight whilst reaping the benefits of more effective data capability.

This brings the theory into practice and provides the comfort to organisations that their business of making money isn’t impeded but there is also a good risk and return barometer in place.