Golden Copy: The Eminence of Governance

Picking up a thread that Inside Reference Data began following last month, about the importance of staffing and sourcing when implementing data governance efforts, two stories in this month's issue look at how accountability and the overall culture of a firm should be dealt with to direct staffing and sourcing decisions made in data governance plans.

In "What Governance Requires," Peter Travers of Eagle Investment Systems describes how accountability requires navigating differences between front and back offices, as well as differences between business-oriented personnel or executives at a firm and their technology operations counterparts.

While the business case for a data governance plan is more important, in Travers' view, "it's always going to be a combination of business and technology for sure," he says. What this really means is that C-level business executives need to be willing to take ownership of plans that at least begin with contributions from IT, to design how data operations are going to work.

"Emerging Mechanics" recounts how Canadian financial data experts -- speaking about data governance on a universal basis -- set responsibility for data governance plans and go about carrying those plans out in their operations.

"There are still departmental data models," said CIBC's Palash Thakur. "The rollout and implementation of [centralized] policies still has to be handled within the line of business." Creation and ownership of data governance plans has to be aligned and shared, added April Harbottle, a data governance specialist in the Toronto market. The first step to implementing data governance plans should be ensuring a single central source or "single version of the truth," said Scotiabank's Rob Ord. This means that professionals on both the business and technology sides must understand what different views of data content actually mean, he explained.

This story also covers how data mapping and data routing serve to implement data governance plans. Planning for data governance is increasingly being valued by senior management, and the ways that plans are designed and carried out will determine their success or failure.

On another aspect of addressing data management challenges, the regulatory-driven Fundamental Review of the Trading Book (FRTB) risk-evaluation requirements are creating a need to change data operations, as reported in "Overcoming the FRTB Challenge." Under FRTB, set to take effect at the start of 2019, firms must exhibit greater accuracy in data relevant to calculating risk exposure and capital adequacy. As with data governance, sourcing is a function to be addressed, but with FRTB, trading desk structure and calculation methods will also come into play. The possibility of forming an industry utility is another consideration for interested parties.

Lastly, this issue also contains "Designs on Derivatives," reporting developments with ISIN and FIBO identification standards in relation to blockchain. The expanded version of this story from Risk.net, our sister site, can be found here.