Informatica Perspectives

According to a recent FT.com article, US lawmakers are seeking to expand the reach of anti-money laundering regulations after a Senate investigation found that hundreds of millions of dollars in suspect foreign funds have been able to land in the US. As we can see, money laundering and terroristic financing continues to rise despite the huge investments banks have made in packaged Anti-Money Laundering (AML) software, custom built solutions through global system integrators, re-engineered business process, people, and policies.  How can this be? Were these bad investments to begin with or is there something else causes these issues? [Read more]

Back in June 2009, the Financial Accounting Standards Board (FASB) published Financial Accounting Statements No. 166, Accounting for Transfers of Financial Assets, and No. 167, Amendments to FASB Interpretation No. 46(R), which changes the way entities account for securitizations and special-purpose entities. The new standards will impact financial institution balance sheets beginning in 2010 and will require substantive changes to how banks account for many items, including securitized assets that had been previously excluded from these organizations' balance sheets. Banks affected by the new accounting standards will be subject to higher risk-based regulatory capital requirements. So what does it all mean and how much will it cost banks to comply?  [Read more]

According to a 2008  Forrester Research study, attracting and retaining top customers remains one of the highest priorities for CEOs today.  Here’s why:

• The cost of losing one customer is four times higher than the cost of obtaining that same customer  (Return on Behavior Magazine)
• Satisfying and retaining current customers is 3 to 10 times cheaper than acquiring new customers, and a typical company receives around 65 percent of its business from existing customers (McKinsey, 2001)
• A 5% reduction in the customer defection rate can increase profits by 25% to 80% (Return on Behavior Magazine)
• 7 out of 10 customers who switch to a competitor do so because of poor service (McKinsey, 2001) [Read more]

The Basel Committee on Banking Supervision of Switzerland-based Bank for International Settlements (BIS) updated the conditions to the Basel II accord this year to further strengthen banks’ regulatory and capital framework. The amendments include the provision of more capital for exposure to structured investments such as collateralized debt obligations and asset-backed securities that have been blamed as the root cause of the financial crisis. The committee also imposed higher standards for determining the risks of such instruments. It also required banks to disclose their holdings of these instruments to prevent speculation among market players on the strength of banks’ finances in relation to their capital market activities. [Read more]

I was driving to work this week when I heard about Walt Disney Company's announcement to buy comic book giant Marvel Entertainment (MVL) for US$4 billion.  I started thinking about what it would be like to see the X-MEN hanging out with Snow White’s Seven Dwarfs the next time I take my kids to Disneyland. At the same time, I was wondering if an increase mergers and acquisitions were a sign of an economic recovery?  [Read more]

According to Ovum, “Organizations need to protect their most valuable information assets during the current recession in order to be prepared for recovery.” The analyst firm warned that economic downturns could disrupt organizations’ operations and lead to the waste of information assets in the inevitable downsizing process. It continues to say that, “Loss or leakage of information may cause a violation of legal or regulatory compliance requirements that may have consequences beyond the immediate penalty imposed on the organization.”

Therefore, can organizations afford not to adopt data governance in the current recession? Absolutely NOT! It is even more important in a tough economy to ensure the availability of proper, accurate, and consistent data as companies invest scarce resources in customer acquisition and retention marketing, merge and acquire other companies, manage risk, and ensure regulatory compliance. Despite budget cuts, investment in data governance is expected to grow over the next few years as shareholders and consumers alike will benefit as data governance emerges as a required discipline, giving rise to greater trust, better transparency and reduced risk. So what can organizations do to ensure success?

[Read more]

Demand and interest for data governance continues to grow, despite current macro economic conditions and shrinking technology budgets. What’s driving interest? Well, I can sum it up to three main categories which include:

• Increase in regulatory oversight, corporate transparency, and accountability
• Need to reduce costs and improve operational efficiencies
• Improve visibility and relationships with customers and partners

Over the past several quarters, I have met with companies across different industries about data governance which has generated some interesting myths I would like to address including:

• Myth #1: Data governance has to be done across the company all at once
• Myth #2: Data stewardship practices require outside experts
• Myth #3: Data governance is all about MDM and MDM is all about Data governance [Read more]

Business glossaries are comprehensive lists of common business vocabulary that enable a common language between business and IT.They provide the foundation for data governance initiatives that brings together cross-functional teams to make interdependent rules or to resolve issues or to provide services to data stakeholders.

By giving business context to technical artifacts (technical metadata), the business glossary makes it possible to catalog, govern and use valuable corporate data in a trusted, consistent and efficient manner.

While it would be hard to find someone to disagree on the value of a business glossary, I've heard mixed opinions on the tactical implementation of it–particularly in the context of large enterprises. Specifically, whether or not having just one enterprise business glossary to govern valuable corporate data is practical and timely enough to implement and quickly benefit from. [Read more]

Over the past several quarters, I’ve had the privilege of speaking with a number of companies involved in data governance. The interesting thing I found: firms who identified both drivers as critical, but only invest in one and not the other.

Case in point: a leading financial services firm implemented a data governance program to improve the comprehension and accuracy of the company’s existing board reports. I learned that one of their goals was to define their business terms and definitions (i.e. business metadata) to help non-technical users improve their understanding of the data used to run the business. What I found fascinating was that this was being done prior to addressing their data quality issues. In fact, when asked, “Do you have data quality challenges?” most business users said “yes”. Unfortunately, no one at this company knew to what extent. Instead, their focus was on defining their business metadata. This leads me to ask, “Can you trust your metadata without addressing your data quality issues as part of a data governance practice?”

If metadata is information about your data which your business users are relying on to drive decisions, but the source data is not clean, how will that affect your business? The answers seem self-explanatory. Of course you can’t trust your metadata if you have poor quality data.  For example, business metadata is defined from an approved list of valid values. Unfortunately, if the data used to define those values are incorrect, the downstream impact is you end up with inaccurate metadata.

Organizations implementing data governance programs need to consider the lifecycle of how data is captured, processed, and delivered to downstream systems— whether that is your data warehouse, master data management application, data hub or CRM system. Creating, defining, and publishing business metadata without addressing your data quality issues may not help companies looking to benefit from data governance.

Now that the $700 billion dollar Troubled Asset Rescue Program (TARP) has been approved by the government, firms on Wall Street are preparing themselves for even more oversight and scrutiny by lawmakers and taxpayers. Survivors from the market meltdown will be required to establish tighter controls, policies, standards, and processes for managing and delivering trusted information for decision making, auditing, and regulatory reporting than ever before. [Read more]