Bloomberg Professional Services January 17, 2018
When financial firms began establishing the chief data officer role in response to stepped up regulation in the early 2010s, their focus was on compliance. The CDO’s immediate tasks involved setting up rules for data governance and building platforms to implement them. Their mission was relatively simple: satisfy regulatory requirements, reduce business risk and ensure that data was transparent. As one U.S. commercial bank’s CDO put it, his job was to “keep the regulator happy and away as far as possible.”
While setting up an approach to meeting regulatory requirements was technically challenging, once the proper systems and procedures were in place, the work became more about compliance than strategy. In the U.S. especially, the more CDOs settled into their roles, the more they recognized just how tightly data was knitted into their company’s business. The information they’d been concerned with from a regulatory perspective offered great value in and of itself.
In short, they realized their data could be monetized. It didn’t take long for CDOs to grasp that data could identify efficiencies that reduced expenses, or even generate revenue by using its insights as a product. Not to follow such a path would damage their firms, many believed. Focusing “purely on the end result on the regulatory side has really hurt the industry,” declared the former CDO of one U.S. investment bank. “What they really need to do is focus on the base data. If you get that right, then it’ll flow through.”
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