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Master Data Management
The Discipline of Operationalizing Data Quality and Data Governance
MASTER DATA MANAGEMENT
The Discipline of Operationalizing Data Quality and Data Governance
Data at the Core of the Enterprise Most major financial services firms are pursuing strategies to better manage the data that flows throughout these complex institutions. Data is produced by every business function across the enterprise, supports operational processes, and is used for all forms of reporting. In many ways, data is as fundamental to most financial services firms as the financial assets that flow throughout them. Many firms are now looking at best practices for managing data as an asset. Data as an asset is not a new
“...from separate security master files, client information files, and account masters to compliance and reporting warehouses and counterparty databases. ”
idea, but given the expansion of global regulation and board level focus on risk management practices, data is emerging as a linchpin connecting major business objectives across banks, insurance companies, and leading firms operating throughout the capital markets. Enterprise data management programs are being established or refined, and most firms are focused on data quality and data governance. While the focus on data quality and data governance is common, so also are many of the problems across the industry. In a recent study by IBM, only 39% of banking executives surveyed indicate that their institution was effective at collecting, aggregating and storing data. Working across many institutions, our teams at Kingland have seen this problem surface most often as separate systems containing the same types of data with a variety of operational, IT, and business stakeholders all involved. These systems range from separate security master files, client information files, and account masters to compliance and reporting warehouses and counterparty databases. The challenges banks and capital markets firms are having just using common data across the multitude of systems is shining a light on the need for data quality and data governance. Given the risk and regulatory requirements, much of the attention is on the foundational financial services data types: securities data, business entity data, and hierarchy data.
2
© 2011 Kingland Systems Corporation
MASTER DATA MANAGEMENT
The Discipline of Operationalizing Data Quality and Data Governance
MDM – Technology and Approach
“MDM is not just a technology; it is a series of practices or an approach for managing data, improving quality, and implementing components of data governance using technology”
Master Data Management (MDM) has evolved over the last ten years and has become an essential component in the financial services data quality and data governance strategy. However, MDM is often misunderstood as just a technology or as tools to aggregate data to create a “golden copy”. MDM is not just a technology; it is a series of practices or an approach for managing data, improving quality, and implementing components of data governance using technology. While data aggregation is an important capability, MDM also provides reliable data to systems and applications throughout the enterprise, enabling them with various forms of system to system or application integration. Core to financial services, MDM enables firms to integrate, master, and distribute reliable securities data, data about clients and counterparties, and the webs of business and market relationships.
Integrate
Master
Multiple Sources
an Authoritative View
Sources Multiple
View Authoritative an
Integrate
Manage
Distribute to Multiple Systems
Systems Multiple to
Distribute
Providing reliable, mastered data to downstream risk, operations, compliance, trading, and other critical systems enables firms to implement data governance and quality practices that better align the enterprise. Data-driven alignment across business units • increases the accuracy and responsiveness of risk management practices • improves compliance processes • enhances enterprise wide reporting (both internal and regulatory)
3
© 2011 Kingland Systems Corporation
MASTER DATA MANAGEMENT
The Discipline of Operationalizing Data Quality and Data Governance
Plus, improvements in data quality help business units reduce costs associated with managing data exceptions and expand functions through the use of the mastered data. At a more practical level, the table below outlines many of the direct benefits of MDM that support both data quality and data governance.
MDM Benefit
Data Quality
Data Governance
Applying data standards to mastered data used across the enterprise Assigning ownership of data to “data stewards” with tools to manage the data Eliminating the same data managed in multiple locations (silos of data) Systemically controlling data inaccuracies and minimizing duplication Supporting enterprise applications with reliable, governed data
“...through MDM, the institution is now managing data related to the clients, hierarchies, or securities of interest that can be leveraged by other business units across the enterprise.”
Focusing and optimizing data management efforts to reduce costs and increase business results
Applying MDM: Securities, Business Entities, and Hierarchies Consider the following; most compliance processes such as KYC or client on-boarding are focused on two appropriate priorities: 1) adhering to the regulation and 2) following specified processes put in place, not managing data. Many securities setup or origination processes are focused on getting securities or products in place for trading or other business needs, not managing data. Using MDM to support the data processes behind the scenes from these critical compliance functions can be a non-invasive way to build and manage the data asset by leveraging existing functions. MDM also improves the efficiency of core business processes by eliminating re-work, duplicate work, and improving the entire information supply chain. Plus, through MDM, the institution is now managing data related to the clients, hierarchies, or securities of interest that can be leveraged by other business units across the enterprise.
4
© 2011 Kingland Systems Corporation
MASTER DATA MANAGEMENT
The Discipline of Operationalizing Data Quality and Data Governance
Using Kingland’s MDM approach of Integrating, Mastering, and Distributing, data from the compliance processes mentioned above would be integrated into an MDM system.
“Enterprise Hub is an extensible, rules-driven, MDM platform that enables data quality to be managed and monitored throughout a variety of features optimized for securities, client and counterparty, and hierarchy data.”
If a client, counterparty, or security exists elsewhere in the enterprise, the management, or “mastering” function of MDM enables higher quality data for this respective record and if the record is new, it’s now available for use by other processes and business units. Finally, as the compliance processes require specific data, the MDM system can distribute the required client, counterparty, security, or even hierarchy record to the requesting processes.
360 Data Enterprise Hub MDM Platform At Kingland, we have been managing financial services reference data for more than 20 years and have developed and implemented MDM strategies on some of the largest data projects in the industry. As highlighted in the Integrating, Mastering, and Distributing approach to MDM, there is a pattern and set of disciplines that work, which are embedded into the features and functionality of our 360 Data Enterprise Hub MDM platform. Partnering with IBM and leveraging industry-leading MDM Server technology, Enterprise Hub is an extensible, rules-driven, MDM platform that enables data quality to
Enterprise
Hub Clarity UI Services
Integration
Staging
Work
Consumption
Organization Data Sources
Hierarchy Data Sources
Integrator
Sentry
Courier
Securities Data Sources Rules
5
© 2011 Kingland Systems Corporation
MASTER DATA MANAGEMENT
The Discipline of Operationalizing Data Quality and Data Governance
be managed and monitored throughout a variety of features optimized for securities, client and counterparty, and hierarchy data. Additionally, the use of an extensive services layer of more than 1,000 services enables enterprise integration of mastered data with controls for security, privacy, data lineage, and many other critical features.
“...a 360 Data Master
Expansive data stewardship capabilities enable institutions to institute data governance
File solution also can be used to outsource data quality functions through managed data services providing 99% accurate data…”
across the business or even around the globe.
through segregation of duties and allocation of data work across different operations
From a data quality perspective, Enterprise Hub enables true enterprise management of the foundational data of the financial services industry – securities, clients and counterparties, and hierarchies. Instituting quality controls as data is integrated, as data is cleansed, managed, and enriched, and controlling quality as data is distributed to systems and applications around the enterprise is part of the power of Enterprise Hub. Additionally, a 360 Data Master File solution also can be used to outsource data quality functions through managed data services providing 99% accurate data specifically on the securities, clients and counterparties, and hierarchical relationships that are important for an institution’s unique business and data quality strategy.
Multiple Data Sources
Automated Validation
Professional Validation
Master File
Process and Business Rules
Enterprise Hub is also an effective data governance tool. Technology enabling data lineage and rules of visibility to control what data is persisted and which users and applications are able to use mastered data are core data governance practices inherent in how Enterprise Hub is driving value. Additionally, implementing data standards in an
6
© 2011 Kingland Systems Corporation
MASTER DATA MANAGEMENT
The Discipline of Operationalizing Data Quality and Data Governance
MDM environment and providing interactive feedback to data stakeholders around the enterprise also flexibly supports the data governance models different enterprises choose to implement. Enterprise Hub and its underlying IBM software support all forms of MDM implementation including consolidation, coexistence, transaction, and registry, providing ultimate flexibility for true enterprise data management strategies and evolving data governance needs.
Moving Forward Many companies are looking at MDM, data quality, and data governance. Kingland’s 360 Data suite of MDM solutions including Enterprise Hub and Master File can be powerful tools in the financial services data quality and data governance toolbox. Whether a firm is just getting started in data quality or data governance or a few years down the road, we recommend a few very specific suggestions to begin to manage data as an asset and improve risk management and compliance practices. •
Identify business units or enterprise wide programs that have data related goals; determine the data governance priorities and determine the data quality problems that exist
•
Establish a strategy for securities, clients and counterparties, and hierarchies; all of the business units need this data
•
Evaluate MDM from multiple perspectives; think approach and technology options; think business impact and IT impact
7
© 2011 Kingland Systems Corporation
MASTER DATA MANAGEMENT
The Discipline of Operationalizing Data Quality and Data Governance
For More Information To learn more about Kingland Systems’ MDM solutions, please contact us at [email protected], or visit kingland.com/360data
Kingland Systems Kingland Systems is IBM’s leading Master Data Management (MDM) software business partner for the financial services industry. Kingland’s 360 Data MDM solutions, Enterprise Hub and Master File, powered by IBM InfoSphere Software, enable the management of securities, client and counterparty, and hierarchy data, all critical data domains for the industry’s risk management and regulatory needs. With more than 20 years of experience providing solutions to some of the industry’s largest institutions, Kingland’s CMMI-certified teams produce mission critical risk, compliance, and data applications and strategies that support hundreds of thousands of professional users across more than 140 countries.
© 2011 Kingland Systems Corporation 1401 Sixth Avenue South Clear Lake, IA USA 50428 (641) 355-1000
InfoSphere Software
Master Data Management
The Discipline of Operationalizing Data Quality and Data Governance
MASTER DATA MANAGEMENT
The Discipline of Operationalizing Data Quality and Data Governance
Data at the Core of the Enterprise Most major financial services firms are pursuing strategies to better manage the data that flows throughout these complex institutions. Data is produced by every business function across the enterprise, supports operational processes, and is used for all forms of reporting. In many ways, data is as fundamental to most financial services firms as the financial assets that flow throughout them. Many firms are now looking at best practices for managing data as an asset. Data as an asset is not a new
“...from separate security master files, client information files, and account masters to compliance and reporting warehouses and counterparty databases. ”
idea, but given the expansion of global regulation and board level focus on risk management practices, data is emerging as a linchpin connecting major business objectives across banks, insurance companies, and leading firms operating throughout the capital markets. Enterprise data management programs are being established or refined, and most firms are focused on data quality and data governance. While the focus on data quality and data governance is common, so also are many of the problems across the industry. In a recent study by IBM, only 39% of banking executives surveyed indicate that their institution was effective at collecting, aggregating and storing data. Working across many institutions, our teams at Kingland have seen this problem surface most often as separate systems containing the same types of data with a variety of operational, IT, and business stakeholders all involved. These systems range from separate security master files, client information files, and account masters to compliance and reporting warehouses and counterparty databases. The challenges banks and capital markets firms are having just using common data across the multitude of systems is shining a light on the need for data quality and data governance. Given the risk and regulatory requirements, much of the attention is on the foundational financial services data types: securities data, business entity data, and hierarchy data.
2
© 2011 Kingland Systems Corporation
MASTER DATA MANAGEMENT
The Discipline of Operationalizing Data Quality and Data Governance
MDM – Technology and Approach
“MDM is not just a technology; it is a series of practices or an approach for managing data, improving quality, and implementing components of data governance using technology”
Master Data Management (MDM) has evolved over the last ten years and has become an essential component in the financial services data quality and data governance strategy. However, MDM is often misunderstood as just a technology or as tools to aggregate data to create a “golden copy”. MDM is not just a technology; it is a series of practices or an approach for managing data, improving quality, and implementing components of data governance using technology. While data aggregation is an important capability, MDM also provides reliable data to systems and applications throughout the enterprise, enabling them with various forms of system to system or application integration. Core to financial services, MDM enables firms to integrate, master, and distribute reliable securities data, data about clients and counterparties, and the webs of business and market relationships.
Integrate
Master
Multiple Sources
an Authoritative View
Sources Multiple
View Authoritative an
Integrate
Manage
Distribute to Multiple Systems
Systems Multiple to
Distribute
Providing reliable, mastered data to downstream risk, operations, compliance, trading, and other critical systems enables firms to implement data governance and quality practices that better align the enterprise. Data-driven alignment across business units • increases the accuracy and responsiveness of risk management practices • improves compliance processes • enhances enterprise wide reporting (both internal and regulatory)
3
© 2011 Kingland Systems Corporation
MASTER DATA MANAGEMENT
The Discipline of Operationalizing Data Quality and Data Governance
Plus, improvements in data quality help business units reduce costs associated with managing data exceptions and expand functions through the use of the mastered data. At a more practical level, the table below outlines many of the direct benefits of MDM that support both data quality and data governance.
MDM Benefit
Data Quality
Data Governance
Applying data standards to mastered data used across the enterprise Assigning ownership of data to “data stewards” with tools to manage the data Eliminating the same data managed in multiple locations (silos of data) Systemically controlling data inaccuracies and minimizing duplication Supporting enterprise applications with reliable, governed data
“...through MDM, the institution is now managing data related to the clients, hierarchies, or securities of interest that can be leveraged by other business units across the enterprise.”
Focusing and optimizing data management efforts to reduce costs and increase business results
Applying MDM: Securities, Business Entities, and Hierarchies Consider the following; most compliance processes such as KYC or client on-boarding are focused on two appropriate priorities: 1) adhering to the regulation and 2) following specified processes put in place, not managing data. Many securities setup or origination processes are focused on getting securities or products in place for trading or other business needs, not managing data. Using MDM to support the data processes behind the scenes from these critical compliance functions can be a non-invasive way to build and manage the data asset by leveraging existing functions. MDM also improves the efficiency of core business processes by eliminating re-work, duplicate work, and improving the entire information supply chain. Plus, through MDM, the institution is now managing data related to the clients, hierarchies, or securities of interest that can be leveraged by other business units across the enterprise.
4
© 2011 Kingland Systems Corporation
MASTER DATA MANAGEMENT
The Discipline of Operationalizing Data Quality and Data Governance
Using Kingland’s MDM approach of Integrating, Mastering, and Distributing, data from the compliance processes mentioned above would be integrated into an MDM system.
“Enterprise Hub is an extensible, rules-driven, MDM platform that enables data quality to be managed and monitored throughout a variety of features optimized for securities, client and counterparty, and hierarchy data.”
If a client, counterparty, or security exists elsewhere in the enterprise, the management, or “mastering” function of MDM enables higher quality data for this respective record and if the record is new, it’s now available for use by other processes and business units. Finally, as the compliance processes require specific data, the MDM system can distribute the required client, counterparty, security, or even hierarchy record to the requesting processes.
360 Data Enterprise Hub MDM Platform At Kingland, we have been managing financial services reference data for more than 20 years and have developed and implemented MDM strategies on some of the largest data projects in the industry. As highlighted in the Integrating, Mastering, and Distributing approach to MDM, there is a pattern and set of disciplines that work, which are embedded into the features and functionality of our 360 Data Enterprise Hub MDM platform. Partnering with IBM and leveraging industry-leading MDM Server technology, Enterprise Hub is an extensible, rules-driven, MDM platform that enables data quality to
Enterprise
Hub Clarity UI Services
Integration
Staging
Work
Consumption
Organization Data Sources
Hierarchy Data Sources
Integrator
Sentry
Courier
Securities Data Sources Rules
5
© 2011 Kingland Systems Corporation
MASTER DATA MANAGEMENT
The Discipline of Operationalizing Data Quality and Data Governance
be managed and monitored throughout a variety of features optimized for securities, client and counterparty, and hierarchy data. Additionally, the use of an extensive services layer of more than 1,000 services enables enterprise integration of mastered data with controls for security, privacy, data lineage, and many other critical features.
“...a 360 Data Master
Expansive data stewardship capabilities enable institutions to institute data governance
File solution also can be used to outsource data quality functions through managed data services providing 99% accurate data…”
across the business or even around the globe.
through segregation of duties and allocation of data work across different operations
From a data quality perspective, Enterprise Hub enables true enterprise management of the foundational data of the financial services industry – securities, clients and counterparties, and hierarchies. Instituting quality controls as data is integrated, as data is cleansed, managed, and enriched, and controlling quality as data is distributed to systems and applications around the enterprise is part of the power of Enterprise Hub. Additionally, a 360 Data Master File solution also can be used to outsource data quality functions through managed data services providing 99% accurate data specifically on the securities, clients and counterparties, and hierarchical relationships that are important for an institution’s unique business and data quality strategy.
Multiple Data Sources
Automated Validation
Professional Validation
Master File
Process and Business Rules
Enterprise Hub is also an effective data governance tool. Technology enabling data lineage and rules of visibility to control what data is persisted and which users and applications are able to use mastered data are core data governance practices inherent in how Enterprise Hub is driving value. Additionally, implementing data standards in an
6
© 2011 Kingland Systems Corporation
MASTER DATA MANAGEMENT
The Discipline of Operationalizing Data Quality and Data Governance
MDM environment and providing interactive feedback to data stakeholders around the enterprise also flexibly supports the data governance models different enterprises choose to implement. Enterprise Hub and its underlying IBM software support all forms of MDM implementation including consolidation, coexistence, transaction, and registry, providing ultimate flexibility for true enterprise data management strategies and evolving data governance needs.
Moving Forward Many companies are looking at MDM, data quality, and data governance. Kingland’s 360 Data suite of MDM solutions including Enterprise Hub and Master File can be powerful tools in the financial services data quality and data governance toolbox. Whether a firm is just getting started in data quality or data governance or a few years down the road, we recommend a few very specific suggestions to begin to manage data as an asset and improve risk management and compliance practices. •
Identify business units or enterprise wide programs that have data related goals; determine the data governance priorities and determine the data quality problems that exist
•
Establish a strategy for securities, clients and counterparties, and hierarchies; all of the business units need this data
•
Evaluate MDM from multiple perspectives; think approach and technology options; think business impact and IT impact
7
© 2011 Kingland Systems Corporation
MASTER DATA MANAGEMENT
The Discipline of Operationalizing Data Quality and Data Governance
For More Information To learn more about Kingland Systems’ MDM solutions, please contact us at [email protected], or visit kingland.com/360data
Kingland Systems Kingland Systems is IBM’s leading Master Data Management (MDM) software business partner for the financial services industry. Kingland’s 360 Data MDM solutions, Enterprise Hub and Master File, powered by IBM InfoSphere Software, enable the management of securities, client and counterparty, and hierarchy data, all critical data domains for the industry’s risk management and regulatory needs. With more than 20 years of experience providing solutions to some of the industry’s largest institutions, Kingland’s CMMI-certified teams produce mission critical risk, compliance, and data applications and strategies that support hundreds of thousands of professional users across more than 140 countries.
© 2011 Kingland Systems Corporation 1401 Sixth Avenue South Clear Lake, IA USA 50428 (641) 355-1000
