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Swear by the four letter word

The last decade brought out the importance of service as a differentiator. It is important to ride the technology growth to provide differentiators in products & services. The reference of “Information age” is just taking shape. Exciting bigger action is waiting to happen. To ride this wave and maximise returns we need to focus on the four letter word – DATA. Swear by it.

 

Only focus for any enterprise:

There are ONLY two focal points to run any enterprise - Increased Revenue and Increased Profits. We all know the CEO is measured by Investor Returns and higher investor returns are delivered only by increased revenue and increased profits. 

I am sure we agree, that for any enterprise – be it a mom & pop shop or multinational conglomerate – the only focus is Profit Maximisation. Profit Maximisation happens only through increased revenue and reduced costs. Well, this is no rocket science and all of us know it. The “How” part is answered with varied approaches and probably meets with encouraging results as well.

It’s a simple rule – ‘the quality of Data determines the quality of profits. Data must drive the ‘How’ part of enhancing profits and reducing costs. The more we make this a golden rule the more enterprises will reach their goals seamlessly. Data Discipline MUST be the D of DNA of an organisation.

 

Data builds relationships

Organisational excellence, enabled by processes, is actually driven by attitude. Attitude is governed by trust. Most meetings ends with high sighs from both the presenter and the participants over laboured discussions on the data presented. Meetings experience arguments and counter-arguments over the data probably because there is inherent disbelief on the data that gets presented.

Clean data builds trusts and trusts build relationships. An employee of the company must have complete trust over the data that (s)he generates, receives, presents for discussion or evaluation.

I learnt (and believe) that “what” & “how” are more potent words than “why” to address any tough situation. Clean data ensures the meeting discussions, armed with quality data, are focused more on ‘what one needs to deliver’ or ‘how one can make a difference’ rather than why this data is incorrect - Clean data elevates quality of discussions.

Clean data delivers the most important of all relationships - client relationships. CxO meetings are important and every sales person / relationship manager on the ground would be more than happy to discuss new business / new products than spend the time with CxO defending / rectifying a wrong data with the client. An incorrect statement, inaccurate debit / credit, erroneous transaction all leads to unhappy client. These expose us to a much more serious issue – Reputation Loss. Let us understand ‘perception is reality’ and clean data provides right perception and right perception ensures happy clients.

 

 

Data is precious

It is time we start treating Data like a precious metal and define our process to secure as one. The source must be defined clearly. The authorities are happy if the source of the yellow metal is authentic & reliable and so is the regulator if the source of data is authentic & reliable.

Every data element MUST be defined. This is the key. Each data element must have a steward & owner defined. Link its nature of being master or transactional; the update frequency and who has the authorisation to update. This entire process must be defined to the last detail. If this process is in place then throw a party and swank about it, because you just saved recurrence of issues that could have drained management time.

 

Data Management budgets are investment, not spend

Today we have data stored across multiple systems and multiple geographies, worse in multiple systems within the same business unit. There are clear cases of duplication of data across multiple system and geographies. Duplicate data costs money, tons of it. The cost doubles because for every stored data needs a backup.

Duplicate data is not just a menace it is a serious obstruction. If there are no clear processes to update a data across all systems and geographies, we contribute complication to a problem that erupts. More importantly, duplicate data does not help us build trust because we do not know which data to rely on. Lack of trust destroys efficient decision making.

Google appeals to me with their simplicity. I learnt the importance of keeping it simple, through Google. It is my view that to make a superior design we need to keep things simple. Let us look at any large enterprise, across any industry vertical. The volume of data has never been a cause for any major issue (sans during any one off migration efforts), it is the way data is structured that creates issues.

It’s imperative to invest in robust data architecture addressing firm’s today’s requirements but more importantly to help tomorrow’s growth.

 

If we don’t invest, it costs

There are many models, experts have come out and continue to work on to measure the costs of inaccurate data. The figures vary but the appalling reality is most of us are oblivious to the huge costs we incur owing to bad data management.

Let us look at our diaries. How many calls we have logged in along with our peers to discuss issues arising out of bad data? A ball park here: Any escalation / fact find call owing to data issues has 5-7 people in the call for an hour and let us assume we are in 3-4 such calls every month – we need run the math to find the costs. Then the loads of mails, back n forth – to find the root, get a solution, accusations, defence and what not??? We would require the cost management team to track and present a report on such costs.  Then there is the cost to fix the data. To fix data issues, there must be a measure on the costs that we incur on:

  1. Penalties arising out of bad data
  2. Identifying the root cause of erroneous data
  3. Correcting the data
  4. Testing and ensuring the rectification is complete and
  5. The reputation loss, if any

I believe, if we publish this information in bold every month, and mark it to the executive / team that is responsible for such errors – may work as a deterrent to stop data errors, probably.

After all, what gets measured gets done!

 

Water the roots, not the branches, for a healthy tree

This section is based on my observations of the investment banking industry, a sector that I can claim possessing reasonable understanding. The bankers work under extreme pressure during client acquisition. A financial sale is dynamic, requires quick thinking and leverages the banker’s thorough hold on numbers. It is from such professionals the system expects patient collection of key data and this is where most gaps happen. In their focus to complete deals data ends up incomplete, inaccurate or inadequate.

This is exactly where an investment bank needs to strengthen data collection process. Banks need to come up with processes that seamlessly collect all relevant data with ease. The more banks invest here, the higher the client experiences. It’s obvious that better client experiences deliver higher results.

When it comes to client information, experience says financial institutions must focus on ensuring ‘first time right’. The thought of big brother watching is as much a primary driver as the client experience. Risk management, reporting and compliance are always on top of the agenda in every senior management meeting. Clean client data ensures compliance across sanctions, exposures and related areas. It is imperative that the client is for the firm and not just for one of the silo and/or a country.

Financial firms have invested significantly in technology to build and deliver products that delivers right yield to the customers. However, it is a fact that the product information is stored in silos to cater to specific businesses. It is a sad fact that same product information are maintained across multiple businesses. This is an unhealthy practice and further opens up possibilities of huge gaps in financial reporting, if the updates are not uniform.

The advent of Master Data Management and Reference Data Management has driven the purpose to build a golden source. A single golden source, owned, stewarded and maintained with zeal ensures a stronger financial firm. This is the root we need to water for the firm to stand stable and grow as a solid tree.

 

Strong root will guarantee:

  • reduction of operational risk that could arise because of inaccurate or incomplete data;
  • reduction of compliance risk;
  • reduction of cost because lesser error corrections and/or penalties.

 

Strong root will assure:

  • better revenues and profits
  • superior client experience
  • enhanced controls towards compliance

To sum this up, a four letter word – DATA is the root to address the core of an enterprise – increased revenue & increased profits.

 Let’s remember, quality of data determines quality of profits.

 

Clean Data is non negotiable
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Anand Sampathkumar

VP, Head Products & Settlements Reference Data

Standard Chartered Bank

Member since

27 Nov 2012

Location

Chennai

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