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Safeguarding success: The importance of information governance in financial services

A magnifying glass on its side highlighting data to signify information governance
Author
Dhiren Patel, Director of Data Governance & Stewardship at Viewpointe

In today’s rapidly evolving digital landscape, the financial sector is faced with unprecedented challenges in managing vast amounts of sensitive information. The need for a comprehensive strategy to handle this data has never been more crucial. This is where information governance comes into play. Information governance is the holistic management of information, encompassing strategies, and policies that balance accessibility, security, and compliance. In this article, we explore the importance of information governance in financial services, differentiating it from data governance and outlining essential steps for its implementation. 

Understanding information governance

Information governance is a multifaceted approach to managing information throughout its lifecycle. It involves policies, processes, and technologies that ensure the effective use, protection, and compliance of information within an organization. 

Gartner defines information governance as “the specification of decision rights and an accountability framework to ensure appropriate behavior in the valuation, creation, storage, use, archiving, and deletion of information. It includes the processes, roles and policies, standards, and metrics that ensure the effective and efficient use of information in enabling an organization to achieve its goals.” 

Key components of information governance

  1. Data lifecycle management: Efficiently managing information from creation to disposal. 
  2. Risk management: Identifying and mitigating risks associated with information, including legal and regulatory risks. 
  3. Compliance and legal considerations: Ensuring adherence to industry regulations and legal requirements. 
  4. Information security: Implementing measures to protect information from unauthorized access or breaches. 

Distinguishing between information and data governance

While information governance is a broader concept that includes data governance, the latter focuses specifically on the technical aspects of managing the data.  

Data governance: Technical precision 

As we mentioned, data governance primarily concerns itself with the technical intricacies of data handling. It revolves around ensuring the quality, security, and efficient use of data within an organization. For example, in financial services, data governance would oversee how customer financial information is stored, processed, and protected to meet regulatory standards. 

Information governance: A comprehensive approach 

In contrast, information governance extends beyond the technical realm. It encompasses legal and regulatory compliance, aligning data practices with overarching organizational strategies. In the financial services context, information governance would not only address how customer data is stored securely but also ensure that it adheres to industry regulations and supports broader business objectives. 

Together, information governance and data governance form a solid foundation for maintaining data integrity and harnessing information as an asset. 

5 Steps to help ensure information governance best practices in the financial sector

The following steps can help provide a framework tailored to the unique challenges and sensitivities within this sector: 

Step 1: Conduct a comprehensive information audit 

Start by identifying all sources of information within the organization. Identify the regulatory, legal, and industry-specific requirements your business may adhere to across the organization. These could differ by state and within various countries where you transact business. 

Assess the value and sensitivity of information to prioritize governance efforts effectively. In the financial sector, this could involve assessing diverse data streams, including customer financial records, transaction histories, and market analytics. 

Step 2: Implement data classification 

Given the diversity and sensitivity of financial data, data classification is crucial. Categorize information based on its importance and risk factors. For instance, confidential customer information may require a higher level of protection than general market trends. Tailor security measures accordingly to create a nuanced and effective approach to safeguarding financial data. 

Step 3: Establish clear information governance policies 

Develop and communicate your organization’s policies for data access, sharing, and disposal practices. For example, a policy might dictate how client financial information is accessed by employees and under what circumstances it can be shared. Ensuring that all stakeholders, from front-line staff to executives, understand and adhere to these policies is vital for fostering a culture of responsibility and compliance. 

Step 4: Invest in technology solutions 

Adopt advanced data management and security tools to streamline information governance processes. For instance, implementing encryption protocols for sensitive financial transactions or deploying AI-driven analytics to identify anomalies can significantly enhance governance processes. Plus, the integration of technology can help automate governance tasks, improving efficiency and effectiveness. 

Step 5: Conduct regular training and awareness programs 

In a sector where the landscape is ever evolving, educating employees on the importance of information governance is a continuous effort. Develop regular training programs tailored to the financial services industry, emphasizing the nuances of handling sensitive financial data. Promoting a culture of responsibility and accountability among employees is essential for maintaining the highest standards of governance. 

Step 6: Continuous monitoring and auditing 

Regularly review and update information governance practices to adapt to evolving threats and regulatory changes. Conduct audits periodically to help ensure ongoing compliance with industry policies and regulations. By staying vigilant and proactive, financial institutions can confidently navigate the complexities of information governance in a rapidly changing landscape. 

Embracing information governance: A strategic asset for long-term success

In conclusion, information governance is paramount in the financial sector for managing the complexities of information in a digital age. By implementing a strong information governance framework, organizations can mitigate risks, maintain compliance, and build a foundation for sustainable success. It is not merely a one-time effort but a continuous commitment to adapting and evolving in response to the dynamic landscape of information management.  

The good news is that financial institutions do not have to go at it alone. Partnering with content services experts that can support your company’s information governance goals by verifying that information is managed efficiently and securely, in compliance with relevant laws and regulations can help organizations avoid costly mistakes and regulatory issues. By embracing information governance as a strategic asset and considering the benefits of expert partnerships, financial institutions can establish secure, compliant, and efficiently managed information environments, fostering long-term success in today’s data-driven world.

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Safeguarding success: The importance of information governance in financial services