In today’s US print edition of the Financial Times I saw an article titled, Bank’s approach to risk data is deeply inadequate. The article reviews the current situation regarding bank preparations and work to comply with bank regulations, specially Basel data standards. It seems, according to the article, banks are in a bad way. They are not doing enough to protect themselves.
What I found very useful in the article was this comment: “Global banks need good data governance rules, rigorous data management, and strong IT infrastructure. In many respects they are already in the data management business.”
This is an awesome quote for two reasons:
- The author, perhaps the Basel standards, separates data governance from data management.
- As written, the commentary applies to many industries, not just banks.
The first point- that data governance is different to data management- might seem obvious. But in the many interactions I have with clients and other analysts this distinction is not as clear or obvious. There are so many different words and meanings used with such powerful and heavy words like governance and management. For example, may IT-types might assume that data management includes data governance. It does not. As Mark Buyer nicely called out some years ago, management implements what is needed to meet the governance requirements.
More insidiously, the very name “data and analytics” almost always leaves out data governance. Some others assume that ‘Analytics’ or ‘business intelligence’ is simply the old name for ‘data and Analytics’. It is not. Analytics and BI tends to equate to reporting or dashboards, or the delivery of insight to a decision maker. While helpful, these are just steps along a much broader journey they looks at decisions themselves and the business process being changed. To do this, sufficient data (and Analytics) governance is needed. See It is all in the name-what does data and analytics mean?
So overall it should be noted that long term, an effective digital business platform will combine aspects of three pillars:
- Analytics and BI
- Data management
- Data and analytics governance
See Build your digital business platform around data and analytics and associated webinar.
The second point is equally notable. It is not only banks that are not overall effective at modern, adaptive, data and analytics governance. Looking back at all those interactions across at many industries, there are many firms with just a greater challenge- and opportunity. It’s as if data (and analytics) governance was defined as a ‘nice to have’. Where I set, it’s more likely that the work of data governance was poorly defined and misunderstood.
In my recent webinar on Effective Data and Analytics Governance, Finally!, I call out some of the misunderstanding. Needless to say it comes down to what words we use, and how they are received.
So all in all it’s a great (and short) article. Well worth the 6 minutes to read and inwardly digest.