Survey Finds Data Silos Still Prevalent

Among 13 Tier 1 and 2 global financial firms, data management ranges anywhere from completely siloed to simply not centralized, according to responses in a survey on the use of data management for risk management conducted by InteDelta, a UK-based risk management consultancy, with support from financial data management services provider Asset Control.

On a scale ranging from 1 for completely centralized to 5 for completely siloed, 23 percent of respondents said their data management is at 5, or completely siloed; 31 percent rated their data management as a 4; and 46 percent rated their data management as a 3, the mid-point on the scale.

Describing their target state for data management using the same scale, 15 percent said 5, or completely siloed; 23 percent said 4, or partially siloed; 31 percent said 3, or neutral; 23 percent said 2, or somewhat centralized; and 8 percent said 1, or completely centralized. Of the firms surveyed, six are Tier 1 and seven are Tier 2.

Asked about the prevalence of siloed data management, Michael Bryant, managing director at InteDelta, says, "It's organizational inefficiency. Many different departments need data—including the front office, finance and operations. Unless the bank makes a concerted effort to bring it all together, each of those departments would do their own thing. That is historically what's happened. The siloed approach is probably the natural way banks will evolve unless senior management prevents that from happening."

Whether data is centralized or is pulled together from silos, the next step for many firms is establishing a golden copy. Among the firms surveyed by InteDelta, 31 percent said they currently do not have golden copy. The remaining 69 percent said they have golden copy for some data, but none said they had a golden copy for most of their data. While 23 percent said they wanted to have a golden copy of most of their data and 62 percent said they wanted a golden copy for some data, 15 percent of respondents said they were not aiming to get a golden copy for any data.

"Having a golden copy requires putting some organization around it," says Bryant. "Not having a golden copy goes along with a silo-based approach. If you have a highly silo-based approach, then you'll probably find you don't have a single golden copy for use in the organization. The two probably go hand in hand."

The more centralized that firms' data management becomes, the more they are also tending to turn to enterprise data management (EDM) solutions, according to the survey. "With the increasing complexity within data management, driven both through regulation and internal considerations, the importance of data quality and clear processes is also set to increase," says Martijn Groot, vice president of product strategy at Asset Control. "This is where EDM truly comes into its own."