For banks in Vietnam, data governance is an important step to realise the vision of becoming a leading data-driven bank, said a PwC expert.
Vietnam’s banking industry should aim at data governance to promote its growth, according to experts.
“Data governance can be considered as an opportunity to build a well-controlled environment, creating tangible benefits of business, saving capital, facilitating the development of digital banks,” said Dinh Hong Hanh, deputy general director of PwC Vietnam Consulting.
“For banks in Vietnam, data governance is an important step to realise the vision of becoming a leading data-driven business, using data as a development platform to meet the requirements of Circular 41, prescribing the capital adequacy ratios in line with Basel II standards, and Circular 13, stipulating the internal control systems, which includes the requirements for an Internal Capital Adequacy and Assessment Process (ICAAP) to carry out Basel II’s pillar 2,” said Hanh at a workshop themed “Data Governancepowering control and growth of the data-enabled banking industry” on November 26 in Hanoi.
A quick on-site survey was conducted with workshop participants to assess the maturity level of data governance with 33 Bank’s management representatives. The result showed 88 percent of participants agreed that good data governance can help improve competitive capabilities through developing digital banking and advanced analytics.
However, most banks are still in the early stages of their enterprise data governance implementation journey.
Less than 50 percent of responses mentioned that their bank has implemented data governance or Data Governance Policies and Procedures as well as developed and determined the role of data stakeholders.
Meanwhile, over 66 percent answered that the bank has not operated the criteria establishment to measure data quality. Only 18 percent indicated that they have built a technology architecture (e.g. platform, tools, etc.) to support for managing bank-wide data.
Irene Liu, deputy general director of PwC Singapore Consulting, said data governance is often approached by banks with two main objectives. Some banks carry out data governance to innovate and automate their business processes while the others expect data governance helps them promote compliance, improve effectiveness and efficiency.
“Over the past 2 years, data governance capabilities have rapidly grown in many financial institutions across the globe. However, it is important to note that the evolution of data governance has recently commenced and we are at a starting point of this journey,” said Liu.
When it comes to an overall data governance framework, David Yakowitz, global leader of Basel committee’s BCBS 239 implementation and compliance, expressed: “The regulators increasingly focus on data governance in risk management and compliance reporting, reflected by the issuance of BCBS 239 in 2013.”
More importantly, the primary concentration in data governance is that critical data elements (CDEs) need to be managed on the foundation of developing consistent enterprise-wide standards about data definition, data ownership, data quality. Hence, these issues must be specifically regulated in data governance policies and procedures. This is the key point that allows data governance to be applied widely, stated Yakowitz.
PwC Vietnam’s Hanh said she strongly believes that Vietnamese banks have sufficient capabilities to become data-driven organisations.
“It can be said that as obtained from specific case of ensuring data quality of risk reporting in the roadmap of implementing Basel II framework, the banks will be able to realise that data governance is necessary for innovation activities such as digital banking development, customer segmentation, product improvement through advanced analysis,” said Hanh.
http://hanoitimes.vn/data-governance-key-to-promote-growth-in-vietnams-banking-sector-300316.html
