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Do you know what your customers want? Do you have the right information to deliver them the best possible service? Without powerful, timely and relevant data at your fingertips your financial firm will struggle to build the competitive edge it needs to deliver consistent and effective customer solutions.
Fortunately, that’s where proactive data quality management can make all the difference.
This is the process of maintaining a high quality of information. In most cases, data quality management (DQM) encompasses data acquisition, processing and distribution to produce actionable and accurate business insights.
Engaging in proactive DQM makes data quality a key part of your strategy. This reduces the risk of poorly informed decision-making and ensures the efficient functioning of your organisation.
So, let’s take a look at a few ways you can make this a reality.
Now we’ve defined the intended concept of data quality management, let’s explore how this applies to the day-to-day world of financial services.
As you’ll know, today’s banking transactions are complex affairs. Data flows through your firm so fast it can be hard to keep up. If the data is accurate, consistent and timely, this doesn’t pose a problem.
However, slow or unresponsive data management can lead to major issues with quality and performance. For example, when carrying out bank reconciliations if you don’t have accurate, timely information you reduce your fraud detection capability.
In the past, human error was the chief cause of such data inadequacies, but, nowadays, automated solutions also play a big part.
Imagine one of your automated processes has an inconsistency or inaccuracy within it. The longer it runs, inaccuracy grows exponentially across your system. This is why proactive data quality management is important. If you are reactive, you are waiting for things to go wrong. With a proactive strategy, you can fix issues before they arise, preventing the proliferation of poor data throughout your systems.
And there’s a cost advantage to this strategy too. Research shows that verifying data upon entry costs $1 and takes $10 to cleanse and deduplicate, while inaction ultimately costs $100 in lost time and productivity. Not only that but following data quality best practices can lead to a 66 percent revenue increase.
So, what do these best practices look like?
For now, let’s take a look at the four main ways your financial organization can achieve proactive data quality management.
Often, data originates from a single source before flowing into multiple systems. So, checking its quality at the source is the best way to prevent low quality data from multiplying and spreading through your data pipelines. So, before you allow your data to roam freely throughout your organisation give it a ‘sense check’.
This means checking everything is correctly formatted, de-duplicated and is relevant to your business strategy, as soon as it becomes a part of your core processes.
Here are a few basic validation checks that can save you trouble down the line:
You wouldn’t let a bull wander around a china shop unattended. And the same rules apply to your data. Even if you commit to validating data on input, you still need to monitor its integrity over time. This keeps your data healthy, relevant and actionable throughout its lifecycle.
But be sure to only monitor the data that drives your business decisions. If you cast your gaze too wide, you run the risk of information overload and may miss important data quality issues in mission-critical services.
To identify mission-critical data you need to prioritise information and then classify it. First you need to prioritise all information based on criteria such as:
Then you can classify such data as either:
Focus on the data you would classify as either vital or sensitive. Anything else is not important enough to justify continued monitoring.
Reporting on data migrations and integrations is rarely done well. You need to give stakeholders timely information so they can react quickly to any critical issues. The best reporting pipelines assign tasks, so everyone knows the next steps. Some common report examples are:
When you deliver these reports, make sure they contain only relevant and actionable information. Don’t cover up the signal with too much noise. If business leaders can’t prioritise data quality actions, you will struggle to make the strategic changes you need to succeed.
For financial firms, a proactive data management strategy is vital to continued success. As a data manager, you know how important good data is to your business and the impact it can have on your bottom line. In many cases, without consistent and accurate information, you can even fall foul of financial auditing and compliance requirements, leading to unnecessary losses in revenue and reputation.
Fortunately, the right data tools and strategy can prevent you from ever ending up in this situation. To find out more about making proactive data management a core part of your organisation’s future, check out our complete guide to data quality and spark the change you need to thrive.