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Master Data ManagementThe Discipline of Operationalizing Data Quality and Data Governance

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Most major financial services firms are pursuing strategies to better manage the data

that flows throughout these complex institutions. Data is produced by every business

function across the enterprise, supports operational processes, and is used for all forms

of reporting. In many ways, data is as fundamental to most financial services firms as

the financial assets that flow throughout them. Many firms are now looking at best

linchpin connecting major business objectives across banks, insurance companies, and

leading firms operating throughout the capital markets. Enterprise data management

programs are being established or refined, and most firms are focused on data quality

and data governance.

While the focus on data quality and data governance is common, so also are many of the

problems across the industry. In a recent study by IBM, only 39% of banking executives

surveyed indicate that their institution was effective at collecting, aggregating and storing

data. Working across many institutions, our teams at Kingland have seen this problem

surface most often as separate systems containing the same types of data with a variety

of operational, IT, and business stakeholders all involved. These systems range from

separate security master files, client information files, and account masters to compli-

ance and reporting warehouses and counterparty databases. The challenges banks and

capital markets firms are having just using common data across the multitude of

systems is shining a light on the need for data quality and data governance. Given the

risk and regulatory requirements, much of the attention is on the foundational finan-

cial services data types: securities data, business entity data, and hierarchy data.

MASTER DATA MANAGEMENT

practices for managing data as

an asset.

Data as an asset is not a new

idea, but given the expansion of

global regulation and board level

focus on risk management

practices, data is emerging as a

© 2011 Kingland Systems Corporation

Data at the Core of the Enterprise

The Discipline of Operationalizing Data Quality and Data Governance

“...from separate security master files, client information files, and account masters to compliance and reporting warehouses and counterparty databases. ”

2

MASTER DATA MANAGEMENT The Discipline of Operationalizing Data Quality and Data Governance

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Master Data Management (MDM) has evolved over the last ten years and has

become an essential component in the financial services data quality and data gover-

nance strategy. However, MDM is often misunderstood as just a technology or as tools

to aggregate data to create a “golden copy”. MDM is not just a technology; it is a series

of practices or an approach for managing data, improving quality, and implementing

components of data governance using technology.

While data aggregation is an important capability, MDM also provides reliable data to

systems and applications throughout the enterprise, enabling them with various forms of

system to system or application integration. Core to financial services, MDM enables

firms to integrate, master, and distribute reliable securities data, data about clients and

counterparties, and the webs of business and market relationships.

Providing reliable, mastered data to downstream risk, operations, compliance, trading,

and other critical systems enables firms to implement data governance and quality

practices that better align the enterprise. Data-driven alignment across business units

• increases the accuracy and responsiveness of risk management practices

• improves compliance processes

• enhances enterprise wide reporting (both internal and regulatory)

“MDM is not just a technology; it is a series of practices or an approach for managing data, improving quality, and implementing components of data governance using technology”

MDM – Technology and Approach

© 2011 Kingland Systems Corporation3


MDM Benefit Data Quality Data GovernanceApplying data standards to mastereddata used across the enterprise

Assigning ownership of data to “datastewards” with tools to manage the data

Eliminating the same data managed inmultiple locations (silos of data)

Systemically controlling datainaccuracies and minimizing duplication

Supporting enterprise applications withreliable, governed data

Focusing and optimizing datamanagement efforts to reduce costs andincrease business results

Plus, improvements in data quality help business units reduce costs associated with

managing data exceptions and expand functions through the use of the mastered data.

At a more practical level, the table below outlines many of the direct benefits of MDM

that support both data quality and data governance.

Consider the following; most compliance processes such as KYC or client on-boarding

are focused on two appropriate priorities: 1) adhering to the regulation and 2) following

specified processes put in place, not managing data. Many securities setup or

origination processes are focused on getting securities or products in place for trading or

other business needs, not managing data. Using MDM to support the data processes

behind the scenes from these critical compliance functions can be a non-invasive way to

build and manage the data asset by leveraging existing functions. MDM also improves

the efficiency of core business processes by eliminating re-work, duplicate work, and

improving the entire information supply chain. Plus, through MDM, the institution is now

managing data related to the clients, hierarchies, or securities of interest that can be

leveraged by other business units across the enterprise.

Applying MDM: Securities, Business Entities, and Hierarchies

“...through MDM, the institution is now managing data related to the clients, hierarchies, or securities of interest that can be leveraged by other business units across the enterprise.”



Using Kingland’s MDM approach of Integrating, Mastering, and Distributing, data from

the compliance processes mentioned above would be integrated into an MDM system.

If a client, counterparty, or security exists elsewhere in the enterprise, the management,

or “mastering” function of MDM enables higher quality data for this respective record

and if the record is new, it’s now available for use by other processes and business

units. Finally, as the compliance processes require specific data, the MDM system can

distribute the required client, counterparty, security, or even hierarchy record to the

requesting processes.

At Kingland, we have been managing financial services reference data for more than

20 years and have developed and implemented MDM strategies on some of the largest

data projects in the industry. As highlighted in the Integrating, Mastering, and Distribut-

ing approach to MDM, there is a pattern and set of disciplines that work, which are

embedded into the features and functionality of our 360 Data Enterprise Hub MDM

platform. Partnering with IBM and leveraging industry-leading MDM Server technology,

Enterprise Hub is an extensible, rules-driven, MDM platform that enables data quality to

360 Data Enterprise Hub MDM Platform

“Enterprise Hub is an extensible, rules-driven, MDM platform that enables data quality to be managed and monitored throughout a variety of features optimized for securities, client and counterparty, and hierarchy data.”

Enterprise Hub

Work ConsumptionStaging

Courier Sentry

Clarity UI

Integration

Integrator

Services

OrganizationData Sources

SecuritiesData Sources

HierarchyData Sources

Rules



be managed and monitored throughout a variety of features optimized for securities,

client and counterparty, and hierarchy data. Additionally, the use of an extensive

services layer of more than 1,000 services enables enterprise integration of mastered

data with controls for security, privacy, data lineage, and many other critical features.

Expansive data stewardship capabilities enable institutions to institute data governance

through segregation of duties and allocation of data work across different operations

across the business or even around the globe.

From a data quality perspective, Enterprise Hub enables true enterprise management of

the foundational data of the financial services industry – securities, clients and counter-

parties, and hierarchies. Instituting quality controls as data is integrated, as data is

cleansed, managed, and enriched, and controlling quality as data is distributed to

systems and applications around the enterprise is part of the power of Enterprise Hub.

Additionally, a 360 Data Master File solution also can be used to outsource data quality

functions through managed data services providing 99% accurate data specifically on

the securities, clients and counterparties, and hierarchical relationships that are impor-

tant for an institution’s unique business and data quality strategy.

Enterprise Hub is also an effective data governance tool. Technology enabling data

lineage and rules of visibility to control what data is persisted and which users and

applications are able to use mastered data are core data governance practices inherent

in how Enterprise Hub is driving value. Additionally, implementing data standards in an

Master FileMultiple Data

SourcesAutomatedValidation

ProfessionalValidation

Process and Business Rules


“...a 360 Data Master File solution also can be used to outsource data quality functions through managed data services providing 99% accurate data…”


MDM environment and providing interactive feedback to data stakeholders around the

enterprise also flexibly supports the data governance models different enterprises

choose to implement. Enterprise Hub and its underlying IBM software support all forms

of MDM implementation including consolidation, coexistence, transaction, and registry,

providing ultimate flexibility for true enterprise data management strategies and evolving

data governance needs.

Moving ForwardMany companies are looking at MDM, data quality, and data governance. Kingland’s

360 Data suite of MDM solutions including Enterprise Hub and Master File can be

powerful tools in the financial services data quality and data governance toolbox.

Whether a firm is just getting started in data quality or data governance or a few years

down the road, we recommend a few very specific suggestions to begin to manage data

as an asset and improve risk management and compliance practices.

• Identify business units or enterprise wide programs that have data

related goals; determine the data governance priorities and determine

the data quality problems that exist

• Establish a strategy for securities, clients and counterparties, and

hierarchies; all of the business units need this data

• Evaluate MDM from multiple perspectives; think approach and

technology options; think business impact and IT impact



© 2011 Kingland Systems Corporation1401 Sixth Avenue SouthClear Lake, IA USA 50428

(641) 355-1000

For More InformationTo learn more about Kingland Systems’ MDM solutions, please contact us at [email protected], or visit kingland.com/360data

Kingland Systems is IBM’s leading Master Data Management (MDM) so�ware business partner for the �nancial services industry. Kingland’s 360 Data MDM solutions, Enterprise Hub and Master File, powered by IBM InfoSphere So�ware, enable the management of securities, client and counterparty, and hierarchy data, all critical data domains for the industry’s risk management and regulatory needs. With more than 20 years of experience providing solutions to some of the industry’s largest institutions, Kingland’s CMMI-certi�ed teams produce mission critical risk, compliance, and data applications and strategies that support hundreds of thousands of professional users across more than 140 countries.

Kingland Systems

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