Well-managed data is a powerful business tool, but if you get it wrong, you could do more harm than good.
So says Mike Healy, senior consultant at Innovative Systems Incorporated (ISI), adding: "Organisations are increasingly data led," he notes. "If the data is poor, they will be led in the wrong direction."
Healy says, while most companies pay lip service to the need for data quality, few are taking the actions necessary to ensure their data quality is maintained and monitored on an ongoing basis. Not only does this result in missed business opportunities and alienated customers, but it also puts the business at risk of non-compliance with various international anti-money laundering (AML) requirements.
Healy explains: "Sending a marketing letter offering all your customers a bigger credit facility would be a bad idea, since perhaps only a fraction of your customers could or should take advantage of that. Trying to sell them a product they already have would be pointless too. In order to properly use data for cross-selling and upselling, you need current, accurate customer information, or you could do more harm than good.
"In recent years, we have seen the advent of big data, with the accompanying processing power, disk availability and tools to do very clever analysis to chart current and future customer behaviour. Everything can be analysed now. The challenge is that, the more sophisticated your data use, and the more data you're using, the more important it is to get the data quality right."
Data quality is also critical when it comes to ensuring the organisation is in compliance with AML and related regulations. One of the most important elements of meeting these mandates is to be able to effectively and efficiently screen customers, suppliers, partners and other parties against sanctions and PEP lists. And at the core of effective screening is the ability to accurately cleanse and standardise both the original data and the list data so that matching can be properly done.
The quest for zero defects in data is unrealistic, Healy adds. "Not all data is created equal. With data, zero defects is not an option. You need to understand which data is most important - which has the biggest business impact. This is where businesses need to focus first. In order to do so, you need to begin with your goal in mind."
Healy, along with other ISI and FinScan experts, will visit SA this month to participate in the ISI/FinScan Executive Forum in Johannesburg and Cape Town. The event will address best practices in data management and compliance with international financial and AML regulations. For more information, click here.
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