Updated: Sep 25, 2020
Jean-Marc Duval (SEQVOIA): Why decentralised data governance is critical to quality
Asset managers and service providers are swimming in huge amounts of data, but often traditional top-down approaches to ensure relevance and integrity aren’t up to the job, argues SEQVOIA Product Analyst Jean-Marc Duval. The solution is decentralised data governance, he says, to spread the task among everyone in the data value chain.
What does decentralised data governance mean?
Today asset managers and their service providers have access to more data than ever before, but in many cases their ability to gather and use it effectively has not kept pace. There are many reasons for this, including data being spread between multiple organisations, duplication of data across several systems within one company, and lack of understanding of the uses that consumers make of the data at the time it is collected. But a more fundamental problem is the traditional hierarchical, top-down approach to data governance. Data owners rely on their teams – often the data producers that already control the information they generate – to perform multiple controls. When errors occur, additional checks are implemented – now by different teams who often do not understand the value of the data and the importance of the controls. The result is that the ultimate consumers of the data, typically external organisations such as distributors, fund platforms and regulators, receive erroneous information.
Decentralised data governance resolves this issue by turning the process around, by delivering data as quickly as possible to as many parts of the value chain as possible. The objective is to empower everyone in the data collection, creation and reporting processes to see and control the data as they perform their duties. While expert data owners retain ultimate responsibility, others help to identify and correct flaws in the data ahead of a formal release to the end-consumer.
What are the benefits of this approach?
Until all process within an organisation are completely automated, the possibility of human error will always prevent the assurance of 100% quality, so it’s essential to focus first on the areas involving the highest value and the highest risk.
Focusing the data governance approach on the data consumer allows organisations to prioritise the most important areas, rather than trying to deal with overwhelming and unmanageable quantities of data; this also leads to a better understanding of the origin, meaning and purpose of data increasing the value that can be derived from the information.
This approach has three important benefits. First, the addition of a descriptive metadata layer, to explain the meaning and purpose of the information, is vital to determining its accuracy and adequacy. Secondly, focusing on data consumers facilitates the tracking of information flows within an organisation and towards third parties, giving data owners a clear view of the departments and value-chains relying on their data. Finally, making the data available to multiple parties removes barriers separating departments and teams, boosting efficiency by enabling everyone to access the same data autonomously and providing more eyes to review it. This also reduces duplication of both data itself and of compliance and reporting processes.
How can companies implement decentralised data governance?
Decentralised governance relies on a pragmatic approach to clearly identify high value, high risk deliverables and focus on their improvement. From the end data consumer, an upstream path allows the identification of all parties contributing to the final output.
Once the source information is described and available, enabling all parties to access the original data as early as possible, rather than using spreadsheet copies, is key within the decentralised approach. And with the owner of the data clearly identified, contributors know who to contact to question data, ensuring that all consumers can henceforth use the corrected version. This approach, implemented through cloud-based technology, will dramatically change operational processes and deliver better data faster and more efficiently to all parties.
Quote: “Once the source information is described and available, enabling all parties to access the original data as early as possible, rather than using spreadsheet copies, is key within the decentralised approach.”
Secondly, focusing on data consumers facilitates the tracking of information flows within an organisation and towards third parties, giving data owners a clear view of the departments and value-chains relying on their data.
Today asset managers and their service providers have access to more data than ever before, but in many cases their ability to gather and use it effectively has not kept pace.
The solution is decentralised data governance […] to spread the task among everyone in the data value chain.