No More Muddling Through Data Governance

Regulations are forcing financial firms to formalize their enterprise-wide data management processes, often through the CDO's office.

Vicino says setting up new data governance organizations like these is not an easy process. "There's no playbook for the industry to follow when standing up an enterprise-wide chief data office. Each organization is standing them up slightly differently, depending on its business drivers."

For Vicino, the nine-month process included developing the organization's vision, establishing guiding principles, and aligning them to the corporate strategy. "Next comes developing a roadmap, determining the organization's structure, and hiring talent before you can take on the specific projects."

Ippoliti and Vicino established a track record for their organizations by implementing a few small projects that would be quick wins.

After setting up her organization, Ippoliti and her team decided to rebuild Raymond James's master data systems, client onboarding systems, client reporting tools, and practice management center, which looks at how the firm manages production for its financial advisers.

Vicino's organization divided potential projects between large strategic and transformative initiatives and those where the organization can determine the problem, remediate it, and demonstrate improvements in 3-6 months. The latter projects fall under the organization's "Fast Start" initiative.

"We are still learning as we go and being very prudent on what we are signing up for, so as we learn, we can refine our approach," Vicino says. Part of that learning process was finding that some projects initially thought to be good candidates for Fast Start took on lives of their own.

"Once business organizations understood the benefits, they quickly wanted to expand the scope of their projects," she says. "This lengthened the project's remediation process beyond the 3-6 months we originally estimated."

Ippoliti and Vicino agree that the best way to roll out and maintain a data governance organization is by prioritizing projects properly.

When Ippoliti was a senior vice president of global data management services at Barclays from 2007 to 2009, the data management organization would prioritize projects by assigning values to their benefit to the business and the regulatory and reputational risk. After that, the team would feed all the values into a spreadsheet that would prioritize the projects.

"You can't just rank everything from one to 100 and implement them in that order," she cautions. "There are politics and other factors, which need to be taken into account."

Vicino says Northern Trust determines a project's priority by how well it is aligned with the institution's corporate strategy. She acknowledges there is a bit of art versus science in project selections, depending on a person's skill at presenting a business case.

Eye on the prize
The top priority for all data governance organizations is to avoid all of the industry buzzwords and the flavors of the month that will distract a team from its core business.

Vicino says buzzwords should not be much of a problem in this case, because data management does not follow the normal business lingo. "You're not talking about sales, revenues, and expense costs. Instead, you are talking about data dictionaries, data profiling, and rationalizing data definitions. This makes it a challenge to communicate across an organization and gain understanding."

Still, according to Atkin, "big data" is a ubiquitous, and mostly meaningless, term on Wall Street. "It could refer to data mining, sentiment analysis, contextual data, data governance, or even data storage. These five important ideas get mushed into one term, which is used as a stupid buzzword."

Ippoliti suggests that firms that don't have an obvious case for a big data initiative could see better returns by focusing on the fundamentals of establishing proper data golden copies, improving data quality, and putting a basic data governance plan in place. "There is so much more efficiency to be gained there than there is from running off to set up a Hadoop lab in a conference room."

Rob Daly is a freelance journalist who has spent more than 18 years covering the IT industry and more than a decade covering the wholesale capital markets. He has delivered news and insights via print, electronic and streaming media. Rob has written on everything from ... View Full Bio