In alliance with

A Model for Data Governance

Does Your Organization Really
Have One?
The current focus on new regulations, mergers and acquisitions in the wake This paper attempts to answer
and their impact on risk management of the Credit Crunch has also left these questions, and offers some
practices, has turned the attention many firms with multiple security straightforward next steps toward
of financial institutions to data. It is masters, multiple entity identification implementing a robust data
increasingly evident that accurate databases and multiple approaches to governance model.
and consistent data is key both to managing them.
compliance with incoming regulations
and to reaping the benefits of a robust Achieving the twin aims of regulatory
risk management strategy. compliance and operational
competitive advantage is possible
Business managers have come to only where a true data governance
the realization that data is an asset model is in place to ensure that all
that can be turned into a strategic stakeholders understand the goals,
advantage. By tapping into their methodologies and deliverables of
data assets, savvy business heads the data management strategy. For
are transforming what was once the many institutions, implementing such
long-forgotten poor stepchild of the a model is a daunting prospect that,
financial enterprise into a weapon even if it’s possible to put in place,
that can be wielded to boost profits, may take years to do so. Many others
streamline operational processes believe they have a model in place,
and meet the stringent needs of when they clearly do not.
new regulation, whatever shape it
eventually takes. What can firms do to prepare their
organizations to adopt a data
The complexity of today’s financial governance model that will help them
institution, however, presents achieve their data management aims?
data managers with unsurpassed What are the key considerations of
challenges, making data consistency, such a model, and where can they get
standardization and timely processing help in setting the main cornerstones
difficult to achieve. The spate of in place?

1
The Enterprise Data Landscape
New regulation is driving demand for Part of this new recognition of the Second, years of restructurings,
data across the enterprise. Shortfalls importance of data management mergers and acquisitions, and other
in risk provisions within financial within the enterprise is also being corporate actions, have made many
institutions highlighted by the driven by the post-crunch emphasis financial institutions highly complex
Credit Crunch are being addressed on risk management. At the base level, organizations, with multiple business
through the tougher capital adequacy regulatory requirements for greater silos, each with its own data and
requirements embedded in incoming provisions for capital adequacy are approach to date management.
regulations like Basel III globally and forcing firms to make smaller amounts
Dodd-Frank in the US, which also will of capital work harder. This means All of this presents data professionals
have a global impact. In all cases, the seeking out new, and potentially more with a huge challenge: how to collect
onus is on the financial institution risky, opportunities in order to achieve and integrate the enterprise data
to generate and maintain the kind the greater return on investment now asset, and present it to the right
of ordered, accurate, consistent and needed to keep clients, management, people, at the right time, in the correct
timely data that the new regulations the board and shareholders happy. format?
will require.
In this aggressive environment, it There is no magic-wand solution
Firms will need to take an enterprise- is essential for risk-takers to have to this challenge. Instead managers
wide view of their businesses, access to as much accurate and timely can help themselves by establishing
presenting a significant data information as possible, in order to a clear model for data consistency,
management challenge. Larger firms in minimize the probability of failure. data processing and on-time delivery
particular may have multiple operating With markets increasingly global, of information for a broad range
entities in different geographies and both in terms of geography and of high level consumers. A data
asset classes, a situation complicated range of asset classes, the traditional governance approach ensures that
by historical merger and acquisition market-based view of risk is no longer all stakeholders across the enterprise
activity. sufficient to cover all bases and allow are pulling together to meet the data
business managers to innovate. management challenge.
However, if regulation is the proverbial
stick driving the marketplace to act, As such, the requirement for The first step is for institutions to take
savvier executives see the ordered, enterprise-wide data for risk a look at their existing processes and
accurate, consistent and timely data management purposes is growing, ask themselves whether they have
they are being required to produce and has been tagged as a ‘killer a governance model in place. Many
as the carrot. Firms are beginning app’ for proponents of enterprise will find that they don’t. However,
to identify the availability of this data management, a discipline that establishing a solid, and clearly and
data throughout the enterprise as a has long sought a truly compelling widely understood, data governance
strategic asset. business raison d’etre beyond the model is a relatively straightforward
cost-saving argument. In other words, process, with the benefits easily
This asset can yield the kinds of the risk management requirement identifiable and quickly achievable.
operational efficiencies business has transformed enterprise data
managers are looking for in today’s management from a technology cost
uncertain markets, by streamlining to a business opportunity.
and automating previously manual and
error-prone processes. But it can also Delivering on the requirement,
present energetic adopters with new however, may be more of a challenge
opportunities to innovate, a capability than it initially appears. First, while
that market practitioners acknowledge the underlying data sets may overlap
is required in order to secure the significantly, the delivery format, data
budget to act. In short, getting full points, update frequency and other
control of enterprise data is no longer elements may vary widely between
a mere cost-saver; it is a catalyst for what is required for regulators and
gaining a competitive business edge. what is required for managers.

2
How Data Governance Underpins
Successful Data Management
As it analyzes its existing processes, a But the default alternative is no What can a robust data
financial institution needs to consider better. Daunted by the prospect
what data governance is, and just as of an enterprise project, with few governance approach
importantly, what it is not (see Figure supporters and high costs, many bring to your organization?
1). Data governance is a term that is firms choose instead to allow their
frequently misunderstood, giving rise disparate businesses, geographies In short, it can yield on-demand access
to the situation where many firms or other silos take their own data to consistent, accurate and fit-for-
believe they have a governance policy management paths. The result is a purpose data. It can transform the
in place when, in fact they do not. bottom-up tangle of disparate data enterprise data asset into a source of
sources, normalization processes information that is consistent across
all aspects of the business, yet flexible
So what is data and taxonomy rules that leads to
enough to be applied correctly to the
inconsistency between operational
governance? areas without any of the benefits nuances of different activities. This
of true data governance. meets the demands set both by new
Simply put, it’s a set of processes that
and changing regulatory environments
allows an institution to make best
Ultimately many firms find themselves and a newly risk-aware senior
use of the strategic asset that is the
somewhere in between, leaning back management and board.
data it holds across the enterprise.
on the time-honored method of asking
A high quality data governance With these incentives, all financial
Joe in the corner. He knows where to
policy takes a top-down, and at institutions should be actively
get that vital piece of information for
times tactical, approach to building engaged in setting a governance
that risk report. He understands where
a framework for managing data model for management of their data
the data comes from and what that
in a way that fits the institution’s asset. Practitioners will find that
says about quality. How? Because he
business model. While the governance getting started is not as arduous as
always has. But Joe won’t be around
model involves all stakeholders, it seems, and a simple set of steps
forever, and there aren’t enough Joes
it must specifically involve both can secure some quick wins, helping
to cover all the bases involved in
business-side and IT/operations-side build momentum and support for true
today’s complex enterprise.
personnel, to ensure the right balance enterprise-wide data management.
is struck to deliver on the promise of Those firms taking this in-between
enterprise-wide data management kind of approach run the risk of
and its associated benefits. missing out on the benefits true data
governance can bring. Worse, by
And what is not data failing to take a proactive approach
they can find themselves creating
governance? a chaotic environment in which
Mainstream thinking around data different business units operate under
governance often leads to an conflicting data approaches.
overwrought response: a rigid, ‘all-
singing, all-dancing’ data management Under this scenario, different operating
initiative that touches all aspects of units may use differently sourced data
the enterprise but that is too unwieldy to drive key calculations relating to
and ambitious to achieve. Attempting risk or trading analytics. They may
to institute a single, enterprise-wide use inconsistent sources of valuations
taxonomy, for example, is too complex or pricing data, resulting in different
to implement within a reasonable ways of evaluating the portfolios they
timeframe, and is likely to prove hold. They may pay multiple times for
fruitless. With the best of intentions, the same data provided by different
practitioners embark on multi-faceted, suppliers, and they may not meet the
multi-year projects that soon run out needs of either the regulators or their
of support as they fail to deliver at the own senior management.
first hurdle.

3
Figure 1. Data Governance

What is NOT Data Governance? What IS Data Governance?

• The guy in the corner who knows where to get that tricky • Identified data stewards who are dedicated to
data set you need so urgently. understanding specific data sets, and their management
needs and processes.

• Broad, sweeping projects to clean up data ‘once and for all’. • Specific tasks aimed at fixing business problems stemming
from data issues.

• Data management perceived as a ‘necessary evil’ that meets • Embracing data management as a strategic activity that
the onerous requirements of harsher regulations but with empowers business managers to maximize returns on their
minimal effort and cost. operations.

• A multi-year process that will involve many casualties and • A swift adoption of a flexible approach to fixing data
reap questionable benefits. problems, learning from the experience, and co-opting new
knowledge for the next challenge.

• A black hole from which there can be no return. • An enlightening process that yields new opportunities as it
moves enterprise data forward.

4
A Check List for Data Governance
From a strategic standpoint, financial Getting this balance right is rarely Getting Started
institutions need a data hierarchy achieved, and once more there is no
and organizational structure that one-size-fits-all solution. Developing With this approach, institutions
frees the availability of data so that an operating model that takes account can make rapid progress toward
it can be used to meet the business of organizational structure, physical an enterprise data governance
objectives of the company. The design location, available IT infrastructure and model. It does not have to be
of this structure also needs to take resources on the ground will depend difficult, nor does it have to break
into account the specific corporate on the individual situation of each the bank. There are quick wins to
objectives of senior management, institution. What is universal, however, be had, along with lessons learned
whether they are a specific is the need to set this operational to be gathered and added to the
methodology for calculating risk and model in place, which can only be broader governance framework.
other analytics or to make sure that achieved by involving both sides of the
regulatory requirements are met across fence from the outset. By executing on demonstrable
multiple regulatory regimes. business solutions, the governance will
Empowering people to make decisions receive early and positive attention
Such a strategic approach requires is also essential, and entails assigning from senior management. As data
internal acceptance among responsibilities. Whatever the ultimate mechanisms and organizational
stakeholders. Achieving this organizational structure, a successful structures take shape, support from
acceptance can be supported by governance initiative needs both management will build, and early
engineering a series of quick wins that project champions and data stewards. benefits will be co-opted to other
builds credibility early on, rather than The former, essentially evangelists areas within the enterprise.
focusing on deploying an enterprise- within the organization, make the
wide taxonomy covering all securities case for governance internally and While successful navigation of the
in all asset classes and geographies, point to early and successive wins complexity of today’s financial
or worse, allowing individual business to build support as the project gains institution requires care and diligence,
units to take on the task themselves, momentum. The latter are needed and a firm focus on where the project
a focused effort to address and fix a to push change through. Data is headed, getting started is simple.
specific business problem can yield stewards, who understand data and
fast results and engender support the business issues addressed, will
among beneficiaries. manage the process on the ground,
implementing the appropriate
Success here can be achieved by data management approach for
empowering people to make decisions the immediate task in hand.
and push through change. Doing so
requires documenting each step; who Highly targeted projects yielding quick
deals with what, how were changes wins can allow the project leaders to
implemented, how frequently is review establish a set of standard procedures
required? In this way, a governance around data sourcing, cleansing,
framework can be built. aggregation and distribution. These
processes should be based on specific
Striking the right balance among business needs. Data managers should
stakeholders is important. Many identify opportunities to demonstrate
ongoing governance projects fail to how governance can help the business,
involve both business practitioners then execute swiftly.
and the IT organization. Instead they
are initiated and led by one side or Lessons learned from the experience
the other. It is essential to involve can be added to the overall
both, allowing for coordination governance model, and applied to
and consistency of approach, the next opportunity to address a
and the efficient deployment of business challenge. This step-by-step
technology resources to solve approach has the dual benefit of both
identified business issues. improving business processes and
gaining internal support for wider
implementation of the initiative.

5
Making It Happen: Accenture
Initiating a successful data governance Current Environment Assessment – Conclusion
project can require a provider who key tasks include:
takes the time to understand the Despite the ongoing reliance on Joe
• In-depth interviews with key
unique situation of each institution, in the corner and failure to implement
stakeholders and staff
has the knowledge base to develop a robust data governance approach
a holistic data governance approach • Assessment of current operating at many firms, now is a good time
and the methodologies in place to procedures for financial institutions to transform
implement the solution. Accenture their data management operations
• Assessment of current
not only understands the complete from a source of cost into a market
communication process
data governance lifecycle, based on advantage. Those financial institutions
our deep knowledge and experience • Assessment of current data that implement data governance
with all types of financial institutions, governance and quality model approaches may not only find
but we also have developed a proven themselves ahead of new regulations,
approach combining leading practice Future-state Environment Design – but also potentially gaining
research, industry insights and our key tasks include: competitive advantages.
core capabilities. • Assessment of leading practice and
high performance model fit
Accenture has years of specialized
• Identification of the future state
experience helping the world’s leading
objectives and operating model
financial services institutions and
capital markets firms, with a track • Conducting a Gap Analysis
record of delivering proven results. Our
• Creation of an implementation plan
Capital Markets Practice is currently
and roadmap
serving 174 clients. We have a
dedicated Data Management practice In implementing this approach
with the experience, knowledge we utilize innovative tools and
base and core skills to deliver data methodologies developed in our
governance projects. Financial Services Data Management
Practice to deliver our core capabilities
While the ultimate solution developed to our clients, including:
during each project is unique, we
develop each solution following our • Data Governance Strategy Planning
three-stage approach honed from this • Operating Model Transformation
specialized experience: Collaborate,
to understand the client’s unique • Business Process Reengineering
requirements and objectives; Current • Accenture Delivery Methods
Environment Assessment, to assess
the current conditions and issues; and Whether it is a full data governance
Future-State Design, to develop and model implementation or the design
implement the solution. Specifically, of a data steward training program,
each stage focuses on: Accenture has the experience and
knowledge to deliver the full range of
Collaborate, taking the time to successful data governance projects.
know the client - key tasks include:
• Introduction of key individuals and
specific assignment of roles
• Establishment of clear scope of
engagement
• Gaining a clear understanding of a
client’s preferred future state vision
• Working with the client to define the
data governance challenges

6
To learn more about how Accenture
can help your firm transform your data
governance model please contact:

Paul J. Obrocki
Accenture Capital Markets
+1 (416) 641-4285
[email protected]

Mark A. Watson
Accenture Capital Markets
+1 (617) 488-1225
[email protected]

Copyright © 2011 Accenture About Accenture

All rights reserved.
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High Performance Delivered and outsourcing company, with
are trademarks of Accenture. approximately 236,000 people serving
clients in more than 120 countries.
Combining unparalleled experience,
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and extensive research on the world’s
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collaborates with clients to help them
become high-performance businesses
and governments. The company
generated net revenues of US$25.5
billion for the fiscal year ended
Aug. 31, 2011. Its home page is
www.accenture.com.

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