4 Best Practices for Managing Reference Data
After 25 years of experience, I’ve noticed a few patterns develop in the way enterprises feel about their data. But in my experience, few themes are as clear and ubiquitous as this one:
I have never talked to a firm that’s completely comfortable with their data compliance and their data standards—and I certainly haven’t talked to a firm that thinks they already have all the data they need.
That doesn’t mean that managing reference data with full confidence isn’t possible. Firms simply don’t know which managing practices are best. Everyone’s so nervous about their data—worrying about regulatory compliance and watching for the next Dodd-Frank or Basel i-ii-iii—that they’re skittish about creating best practices for data management in the here and now.
But what I tell firms is the same thing I’m about to tell you: it doesn’t have to be this way. As long as you have the data, you can create any report you need. And with the best practices in place for managing that data, you have all the data you need to feel comfortable again:
1. Establishing a centralized data hub within your institution.
Many enterprises use multiple data hubs for client specific requirements and needs. . But you want one source of data for your internal use. This simplifies processes and standardizes regulatory reporting. This is your one “one golden copy” or “single version of the truth”. If your data isn’t centralized and managed in a single repository, the data become more complicated and less actionable.
2. Establishing a data governance team and setting the standards from which they’ll operate.
Once you have a hub, the team is next. Your data governance team needs to think about the data needs throughout your enterprise, the sources of the data, and how you sort out which is the most important and accurate data. Business rules like “pricing tolerance” should be within their ability to analyze and examine, giving them the ability to contribute to your enterprise as a whole.
3. Full control and audit-ability of the all data in your enterprise.
What do I mean by “audit-ability”? If there are any changes or revisions to data, you should be able to see within your system who made that change, which leads to also knowing why the data was changed—at NIIT Tech we’ve helped clients integrate systems that streamline this process. Audit-ability allows you to easily view changes and their purposes—which is important in a regulatory environment like the one we have today. Your heads of operations and risk compliance are going to demand these kinds of capabilities so your enterprise can explain to regulators why changes were made.
In short, audit-ability keeps your business honest and keeps you ready for even the most uncertain of regulatory environments.
4. Regular review.
You can’t stay up to date unless you regularly review your data and data management processes. Some companies work with the EDM Council to ensure that these practices are up to date and compliant with regulations—but the will to review can be just as important as the review itself.
Don’t let your enterprise lag in managing its reference data. Stay on top of it so your enterprise can be secure in its data no matter what the future holds.