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Data & Analytics, Risk Management, Governance & Policy

3 minute read

Take Control: 3 Proactive Steps to Avoid Data-Related Regulatory Findings

Mar 14, 2022

Written by: Stephanie Lennon

Banks keep pushing the frontier in leveraging Big Data to drive better decisions. Putting all that information – especially consumer data – to work for your organization doesn’t come without risks. That risk can escalate every time your bank takes its data usage to the next level, making it critical to proactively up your data management game.

Just look at recent trends across regulatory consent orders and Matters Requiring Attention (MRAs). You’ll quickly see a noticeable uptick in data-related findings. When we dig deeper, we learn that many of those issues fell in the preventable category – meaning organizations could have avoided the reputational and financial costs associated with remediating those findings, had they taken a more proactive approach.  

Keeping a close eye to these issues is simply smart business. You already recognize that data is one of the most valuable assets for a bank – so protecting it is paramount. If you need proof in real dollars of the need for good data management, consider that suspicious activity ransomware-related activity was reported at $590 million for the first half of 2021, far outpacing the total of $416 million for all of 2020.

Together, this points increasingly to the need to build a culture where every employee understands, respects and adheres to their responsibility in managing data appropriately – from initial input all the way through proper destruction. This isn’t a task to delegate to the technology team. It’s integral to everyone’s job because everyone touches and uses some piece of data in nearly every daily work task.

However, it’s important to note that creating a data management culture is not a one-size-fits-all approach, as organizations vary in size, charter and function. What regulators expect of a megabank differs what they expect of a small, community bank, and those agencies are only starting to look at fintechs. In our new white paper, Proactive Data-Related Consent Order Avoidance: Stay Ahead of Three Common Citations, my Spinnaker Consulting Group colleagues and I walk you through what regulators are focusing on within different organizations. You’ll want to download your complimentary copy to gain important tactical insights and more details. Until you do, here’s the punchline for making your data environment as regulator-proof as possible.

Three Steps to Avoid the Regulatory Spotlight

Building a robust data management culture takes time and plotting your full roadmap can be daunting. Instead of attempting to do everything right out of the gate, focus on three critical priorities that create a solid data management foundation – and avoid some of the most frequent regulator concerns.

  1. Secure your data.
    Consider this Data Management 101. Cybercriminals are getting more sophisticated, and your security practices and protocols need to increase in lockstep. Beyond traditional data security measures, one important exercise is to have your technical teams build robust and fast processes for locking down your data – then test them out to prove the locks work. With banks and lenders of every size now relying on data for decision-making, regulators are paying greater attention to their data environment and technology backbone – specifically seeking security vulnerabilities.
  2. Protect the integrity of your data.
    We’re now talking about the integrity of your data, especially as you deploy it in developing new services or approving customers for products. The data that you share from the C-Suite to the front line must be flawless to stay above regulatory scrutiny. At a minimum, your data should be complete, consistent and correct, which are challenges for every organization. Getting to that destination – an ever-moving target because data is a real, tangible, dynamic thing – demands a data governance framework. The outcome is that your users can quickly access what data is important to them and know they can rely on the information it provides.
  3. Don’t turn a blind eye to known data vulnerabilities.
    If it’s broken, fix it. You don’t want the regulators to walk in and see you didn’t act on something you knew was amiss. Regulators have been known to make an example of an organization through consent orders to encourage others to act. At the same time, examiners have demonstrated grace when a bank identifies an issue, develops a remediation plan and starts to execute on it in earnest. 

Get Started Now – and Let Spinnaker Help

Creating a culture that supports best practices in data management and ensures every employee embraces their role in it should be an enterprise imperative. Researched and written with my colleagues, Spinnaker’s new white paper, Proactive Data-Related Consent Order Avoidance: Stay Ahead of Three Common Citations, synthesizes our hands-on experience at leading financial institutions. We bring unique insights as data scientists, analysts and process managers to offer you proven practices to build a data management culture that protects you and your customers.

Don’t wait for a regulator to find a data-related issue at your bank (and there’s plenty of proof they will). Download this must-read white paper now – and get started on better guarding and using your data.