By Neetu Shaw,
Executive Partner for Financial Services, Higher Education & Automotive Industries, Clarity Insights

Earlier this year, Forrester coined the term “ambient data governance.” But what exactly does it mean that the discipline has “gone ambient”, and how will this affect financial institutions, in particular?

In a compelling and hard-hitting blog, Principal Analyst Michele Goetz asserts that immediate changes to data governance policies must be made to address customer and compliance-related demands on today’s data. She states, “When we need to take our customers and endpoints into account (as with GDPR and CCPA), we can no longer treat the lines between people, process, digital, analytics, and data separately…(w)hat you really need to do is push data governance and policy execution into all the processes and automation that exist in your ecosystem. We call this ambient data governance.”

Consider this: the word ambient itself means “relating to the immediate surroundings of something.” And, when surroundings change, so too must the policies that govern the activities therein. Budget, timelines and team skill sets may make any reasonable leader wary of drastic changes to data governance programs, but the writing is on the wall: data governance is at a crucial inflection point — one where evolution will offer competitive advantage and reduce painful penalties at once. 

For banks and financial institutions to continue forging ahead, they must be at the top of their game when it comes to customer experience and security alike. Though often heralded for setting data governance gold standards due to the need for stringent regulatory adherence, the financial services sector will need to adopt new guidelines that better take into account when, where and how customers are entering data—and the unique preferences they set up at each touchpoint for access and privacy—in order to more fluidly oversee data and the subsequent exchange, analysis, storage, controls and beyond. 

Security and compliance may only be one piece of the pie when it comes to data governance, yet they are major points of concern for financial institutions. In order to address growing regulatory complexity for customer data privacy while also building assurance and trust by investing in enterprise-grade security, data governance and compliance cannot be at odds with one another, nor can data governance be a one-size-fits-all model based on compliance guidelines alone. Just look at the many factors that go into improving anti-money laundering performance, for example, to see how data governance plays a role: before rules can be set up or analysis conducted on money laundering alerts, the way the information is stored and retrieved as well as the process of profiling and cleansing data entries are critical components that—when effectively established and managed—could ultimately lead to a reduction in false positives and improved ROI. 

All of this must be set with business strategy in mind, including reputation management and eyeing opportunities to create new revenue streams—like platform banking—which would require silo removal and fresh data governance oversight to introduce new information across new channels. 

And since 28 percent of people chose to leave their banks due to unauthorized activity on their accounts (see report), security is as much a customer retention issue as it is a data governance mandate, let alone a major business liability — with each data breach costing a business $3.92 million on average (and financial services firms being 300 times more likely to experience one than other industries). 

Data governance is the lynchpin bringing together efforts to minimize risk and enable efficiency; to equip banks with insights for better decision-making all while enabling greater collaboration between new partners and a positive experience for the customer that builds relationships through digital interactions that are friction-free. The need for ambient data governance only strengthens the call for policies that can stretch to serve changing ecosystems. As you maneuver these changes, let’s talk. Clarity Insights will give you honest solutions to meet you where your greatest needs are for improving your data governance strategy and data management initiatives.

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