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Fined If You Can't Find It: The Consequences of Poor Data Governance

By Scott Magoon, Director of Product Management at Zaloni

"Data-driven" and "actionable insights" are two of the biggest buzzwords for organizations and their tech leaders in 2022. Businesses want to enable a data-driven culture internally and affirm to both potential buyers and current customers that big decisions are being made carefully, with respect for data and personal information. But what happens behind the scenes? In a world where data privacy and security feel more important than ever, how can personal information be kept safe in the event of a breach? What are the consequences for not responsibly governing data? We'll aim to answer these three crucial questions to help your business better understand why data governance-the rules of managing and securing your data-should be a core pillar of any business striving to be data-driven.

What happens behind the scenes?

When a business creates a database, it needs to ensure that it collects all relevant data and securely stores this information. Data, however, is increasingly being stored in disparate areas of an organization, creating a lack of visibility and accessibility. For this reason, it's important that data stewards-the people in your organization tasked with managing and governing your data-know where data is located and have a holistic view of a company's data ecosystem. Without a unified view, it can sometimes take weeks or even months for data to change hands, which slows decision-making and introduces compliance risk. Data quality-ensuring that data is accurate, has the correct formatting, etc.-is key to operating databases. If data quality isn't ensured, analytics and reporting can't be trusted. These details might seem minute, but, as we'll discuss in more detail, they can make or break a business' data strategy and the insights they purport to provide.

How can I keep my business' data safe?

There are already many regulations in place aimed to prevent breaches and, if a breach happens, limit the organization and potential customers' exposure. Within the last few years, organizations have faced an increasing number of compliance initiatives, such as HIPAA (Health Insurance Portability and Accountability Act), GDPR, (General Data Protection Regulation), and others. But these regulations are only effective when sound data governance principles are met and followed. This requires strategies, talent, and of course, financial investment. Many employees see this firsthand when their company sets specific parameters around data and who can access it. Sound password practices are obviously important, but ensuring a process of data access requests is critical as well. A strong data governance platform operates both securely and efficiently to ensure authorized users can quickly access the data they need.

What are the consequences of irresponsible data governance?

$400M. That was the fine for Citibank in October 2020, as the Office of the Comptroller of the Currency (OCC) issued a warning to organizations that dealt with compliance checks: data governance is the first step toward ensuring compliance with regulations. Fines have a clear negative business impact along with the possibility of losing the trust of your customers. So, let's take a deep dive and unpack why data governance, as a whole, is essential.

Data governance is more than just compliance. As mentioned, data is becoming core to many businesses' decision-making strategies. Organizations aiming to make sound decisions need timely access to high-quality, trusted data. If data can't be trusted,  how can businesses take faith in their decisions? Moreover, since artificial intelligence requires data to operate, how can AI generate outcomes that can be taken in confidence by decision-makers if the inputs aren't perfect? Writing a well-performing AI algorithm is quite a feat, but it requires data to operate, and the data must be as good as the algorithm itself.

This is why data governance is such a sticking point for regulators. As the world becomes more "data-driven" where businesses claim to create "actionable insights," regulators want to ensure that the data being used is protected and secure. Anyone can follow a recipe, but the highest quality ingredients will always make for a better meal.




Scott Magoon is Zaloni's Director of Product Management and has over 25 years of experience in product development, sales, and marketing. Before Zaloni he held strategic and leadership roles at innovative companies including AT&T, Kraft Foods, and Cisco Systems.

Published Friday, March 25, 2022 7:31 AM by David Marshall
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