Financial Services Data Quality Needs Improvement

July 28 - Findings of the North American Financial Services Sector Study indicate that companies in the financial services sector are growing more aware of the role data quality and data governance play in regulatory compliance, business decision-making and customer relations. The study was sponsored by SAS subsidiary Dataflux and conducted by Lodestar Research.

The economics of the past 18 months make it more important than ever for financial institutions to be in control of and maximizing their data, the study finds and the concept of data quality is becoming ever present given the sector’s upheaval. Among financial services respondents, 92 percent feel that data quality will become an even bigger issue in the next five years due to the financial crisis.

Among those reporting an enterprise-wide view of data, nearly one- third report that the data is not widely trusted internally. The survey also found that 46 percent of organizations do not manage data at the enterprise or cross-functional level, providing the potential for inconsistent, inaccurate and unreliable data to inhibit corporate growth and risk mitigation efforts.

Other key findings from the study include:

54 percent of respondents consider data quality as a corporate asset for decision-making, while 37 percent are not fully convinced of data quality’s organizational value.
71 percent view data quality as very important to meeting compliance requirements, especially larger firms (84 percent), making compliance the main driver of data quality and data governance investments.
Only 16 percent of respondents have access to key performance indicators (KPIs) in data-driven reports.
56 percent of companies have processes in place to compare customer transactions against international watch lists and crime/terror databases.

“The results we’ve seen are both encouraging and disappointing,” said Tony Fisher, president and CEO of DataFlux, in an announcement. "While many companies seem to have good intentions about planning a data governance program, it’s of no value until they put the practices in place.”

DataFlux, a provider of data quality and data integration solutions, sponsored the study, designed and conducted by Lodestar Research, a Princeton, NJ-based research and strategy consultancy.

The survey, conducted in May 2009, collected data from 296 respondents in the financial services industry. This sampling represented a cross-section of companies by size and of contacts by job titles, though the majority of respondents were IT directors, IT managers and database analysts.

Read our recent feature on data quality, “The Hindsight Conundrum.”

Valerie Valentine is senior editor for Information Management. You can follow her on Twitter at @va1va1entine or via email at valerie.valentine@sourcemedia.com.

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