These days, the importance of acquiring and managing data for banking institutions holds imperative importance for decision-making purposes.With tough economic conditions, Bank Holding Companies (BHC) and International Holding Companies (IHC) have found data management and analysis an important tool while making decisions. Some of the leading US bank holding companies have sufficiently acknowledged the importance of data governance and its contribution towards improved decision-making.
How Does Data Governance Help improve Decision-Making?
In simple terms, data governance is the act of acquiring, managing, and analyzing data to understand market indicators. All banks acquire important customer and market data during their transactions; however, data acquisition is the first step in data governance. There are various aspects to be considered for a banking institution to manage as well as protect data. Financial Industry Regulatory Authority (FINRA) emphasizes on data governance models for IHC, BHC, and US bank holding companies that provides them guidelines to protect their data while offering methods of analyzing the data for making better market decisions.
Data acquisition when managed and analyzed effectively can offer banks with a greater insight on their services availed, type of transactions, type of customers, etc. While this information may seem normal, it is vital in making effective and efficient decisions for business expansion as well as for better service levels. A very important guideline that FINRA equips banks with is the ability to protect customers’ identifiable data, which can be used for criminal and fraudulent activities if it falls in the wrong hands. Secondly, FINRA has effective and efficient models, designed to serve as a guideline for banks to enhance their data management and give them better analytic capabilities that can influence future decisions.
Using Data Acquisition for Decision-Making
For banks, data acquisition is an asset that can be used for making informed decisions, which are a result of extensive analysis to minimize risks. For example, a bank may be planning to expand within a region; in order to expand, the bank would need some input to identify what markets it should expand into and what kind of customers would it need to address. Using data governance policies and procedures, banks can breakdown data and analyze it. This would help in classifying and segmenting important information and give the bank a detailed insight about its business practices as well as highlight the key areas of operations.
Governing data would enable the banks to identify key indicators as well as identify potential risks in their business practices, which can be mitigated using various methods offered by FINRA.
Contribution of Data Governance to Banking Sector
The banking sector is always trying to maintain an edge in the market, which requires constant updates to their policies and procedures. In order to remain competitive in tight market conditions and even tighter economical settings, banks need to maintain an edge to continue business for a foreseeable future. US bank holding companies and IHC regularly update their policies and procedures to achieve higher customer satisfaction as well as increase their data protection. However, the intervention of data governance models in the banking industry has brought phenomenon results. It conveniently offers banks with scope to improve their existing policies and procedures based on certain guidelines that would inevitably increase their data protection mechanics as well as give them the ability to analyze their data for improve decision-making capabilities.
Data governance has offered banking sector with just the right tool to enhance their capabilities in today’s tough economic era, where banks need to optimize their potential, minimize their costs, and make effective decisions that can propel their banking operations to new heights. Data governance is the new discovery that can revolutionize and patronize the banking industry; strengthening business operations.