Mid-Sized Bank Data Governance Initiative Addresses Regulatory Scrutiny

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Summary

Sagence’s mid-size bank data governance assessment and road mapping services achieve enterprise data governance requirements for regulatory reporting compliance and position the Bank for continued growth.

Challenge

Our client has been in business for 125 years and has demonstrated a consistent and enviable record of growth and expansion in a breadth of services and target markets. They are a chartered commercial bank and have grown via acquisitions and organic growth to 175 full-service branches and 13 loan offices throughout the Pacific Northwest and California and have approximately $10 billion in assets. With this growth, the Bank faces increased regulatory scrutiny including 18 weeks of known regulatory exams, of which nine were heavily data dependent.

The Bank’s data had a high degree of impact on four examinations:

  1. Regulatory Capital and Stress Test
  2. Federal Reserve Enhanced Testing
  3. Current Expected Credit Loss
  4. FDIC Large Bank Pricing

The Bank turned to Sagence to develop a lean data governance program and roadmap explicitly designed with the needs of mid-size banks in mind. The Bank understood that with enhanced yet manageable data governance practices, they could confidently meet regulatory requirements and strengthen acquisition conversions by utilizing data-driven decisions for strategic growth priorities.

Solution

A successful data governance program requires collaboration between business leaders and IT and alignment across the organization, processes, and tools. Fostering this collaboration, Sagence conducted a current state data governance assessment comparing and contrasting the Bank against competitors, best practices, and strategic objectives. We interviewed over 40 business and technology stakeholders and representatives from data-focused organizations to ensure we included their feedback and insight in the assessment.

Our current state data governance assessment uncovered five recurring themes common to many mid-size banks:

  1. Enforce Data Access and Ownership: A change in the number of HMDA data fields to support evaluation compliance requires banks establish appropriate processes and systems often lacking in small to mid-size banks.
  2. Centralized Data Source: Due to a lack of resources and a lack of automation, eliminating spreadsheets or other desktop databases (also known as spreadmarts) can help mid-size banks compete in today’s data economy.
  3. Data Integrity and Security: As reports from “spreadmarts” are combined, inaccurate data compounds an already taxed reporting process, and lax data security practices expose banks to potentially catastrophic security breaches.
  4. Knowledge Sharing and Distribution: Products, services, and solutions often remain localized among a bank’s branches, leading to missed opportunities and decreased efficiency.
  5. Streamline Processes: Manual processes cause data quality issues and are roadblocks to improved speed and quality.

 

Based on the results of our assessment, Sagence created an inventory of data sources, roles, responsibilities, processes, and data-related components. We evaluated the Bank’s strategy, organization, tools, procedures, and information security with a focus on:

  • The ability of the data ecosystem to support business strategy and priorities.
  • Data-related pain points and available opportunities.
  • Processes that are manually intensive or cause for data quality issues.

Sagence inventoried data assets, data-related operations, organizational components, and relevant metrics/KPIs. We developed a maturity model assessment to highlight data governance improvement opportunities and created a high-level gap assessment, giving the Bank a strategic roadmap for data-driven decision making to advance the Bank’s mission and goals for continued growth.

Results

With a comprehensive assessment and roadmap across multiple data environments, Sagence delivered a lean data governance program that enabled the Bank to meet competitive, regulatory, and business objectives.

Take Our Mid-Size Bank Data Governance Assessment

If you are a mid-size bank and want to understand how data governance can help your bank meet increased regulatory reporting demands, schedule a brief call with us here.

To learn more about how data governance can help your bank, contact Rodney Mann, a partner with our financial services practice.

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Sagence is a management consulting firm advising clients in information-intensive industries. We specialize in data management and analytics and in the acquisition, evaluation, and development of critical data assets. Contact us today to learn how we can help you leverage your data as an asset.