TRILLIUM SOFTWARE INSIGHTS

Illuminating the Mean Streets - Investigating & Quantifying Data Quality Problems

By Nigel Turner, Vice President, Information Management Strategy, Harte-Hanks Trillium Software

In my previous series of blogs I focused on how one large global organisation, British Telecommunications (BT), recognised the need to take action to address data quality (DQ) barriers to the development of its business, and started to identify candidate cross-organisational DQ problems that could be addressed within the broader context of an enterprise-wide data improvement initiative. 

Now, I plan to highlight how this long list of potential problems was narrowed down to a specific list of initial improvement projects, how business cases for action were made, and how these cases won the backing of BT’s senior executives. This particular blog focuses on how the list of DQ suspects was further narrowed down. Key to this was a detailed investigation of the problems.

It was the time to use forensic techniques. It was time to call in the detectives. 

One famous fictional investigator, Raymond Chandler’s Philip Marlowe, would have recognised the challenge. As he walked alone through the mean streets of LA, Marlowe would learn that dirty data quality deeds had been done, that unspeakable crimes involving data had been perpetrated. His job was to establish the facts, and put things right. As one of Chandler’s most famous Marlowe novels, the ‘Big Sleep,’ memorably stated, “The streets were dark with something more than night,” so investigation was needed to throw light on the data quality problems, and to point the way to a brighter future.

Like all good detectives our DQ investigators started with what they knew. This was the list of 50+ candidate data quality themes and problems uncovered by earlier analysis. It was now time to identify the prime suspects. But the investigators could not do this alone. Expert help was needed. 

So they called in a group that understood the damage these suspects had caused.  This group was known as “The Business.”  A workshop with these business stakeholders was set up. Many of the business people invited had been identified in the first phase of investigations; others were suggested by them.

The investigators provided the list of suspects and let The Business decide on their fate. They used a combination of established techniques – Force Field Analysis, Benefits Management, and the Boston Grid – to help the Business decide which cases to focus on first. There was much wailing and gnashing of teeth but eventually a shortlist was drawn up. The Business also agreed to meet again when the detailed analysis was complete. 

The investigators did what they were told and conducted a detailed examination of the prime suspects. They used two primary tools. First, they interviewed key people impacted at all levels in the organisation, recorded process and people problems caused by the data, and did a first cut assessment of the financial and other impacts (e.g. regulatory compliance) of these problems. In parallel with this, they put their magnifying glasses on the data itself, first identifying the key sources where the delinquent data was held.

Using data profiling tools they then assessed the scale and scope of the data problems in these key sources. They also put together an initial improvement proposal, embracing people, process, technology and the data itself. 

Some general rules emerged from this process. First try to express the impact of DQ problems on the business by their financial impact. This is best done by estimating the costs of poor quality data. What processes fail when data is incorrect or missing?  How much does each failure cost?  How often do these failures happen? What are the estimated costs of failure in six months, one year’s time?  

Second, what other damage is done? How do these failures damage the company’s image and brand? How do they jeopardise the organisation’s ability to meet its legal and / or regulatory obligations?  How are customer perceptions affected?  How is the morale of the organisation’s people impacted?

The end result of these investigations was a detailed analysis of a small number (3-5) of key DQ related problems. The prime suspects had been rounded up and interrogated. The next step was now to decide what their fate would be.  It was time to call in the Business again. See my next blog for what happened next…

Capitalism or Favoritism?

By Shameka Simmons, Banking Attorney, Financial Solutions, Harte-HanksTrillium Software

Shameka Simmons is a Banking Attorney with Harte-Hanks Trillium Software.  She offers a wealth of knowledge about the inner workings and processes of financial institutions, retail/commercial lending, and complex loan transactions.  She gained this expertise through her experience at GMAC (now Ally Bank), the Legal Division of the FDIC Enforcement division, and her active role in the Illinois Attorney General subpoena/investigation of Countrywide at the height of the foreclosure crisis.

Is “Too Big to Fail” still a common reality? Absolutely! Why else would the government allow the country’s second largest national bank (by assets) to transfer its risky security instruments to its retail bank?

This type of conduct is predictable for a troubled bank…that’s why regulations exist to prevent it, due to the risk this type of transfer poses to the deposit insurance fund (DIF). Sections 23A and 23B of the Federal Reserve Act represent an effort to reconcile the objectives of banks’ interactions with their affiliates.  The goal of the act is to protect the bank’s deposits and maintain economic separation between the bank and its affiliate subsidiaries. This is critical to encourage better risk management practices between financially affiliated organizations and to discourage non-bank subsidiaries from benefiting from the government guaranty provided to banks.

But, in the earlier case, shifting risky security instruments to a retail bank indirectly helps to insure the risk generated from investment banking operations, because most deposits in retail banks are insured by the FDIC.  Many would argue that this practice is not fair.  I take the position that (a) it may not be permissible under the law, (b) it may be construed as an act of favoritism for the subject institution, and (c) too big to fail is still a reality in this economic climate.

In light of all this, it becomes easier to justify why these transfers drive the need for the type of LEI solution that Trillium provides its financial services clients, due to the numerous counterparties involved and the risk exposure of different legal entities. In the rare event of a failure of this bank, the LEI solution can help regulators quickly ascertain counterparty identities involved in the transfer and the correct legal entities for an immediate wind down and liquidation of assets.

What do you think?  Is it favoritism or capitalism?