Neil Burge is the CEO of Cognopia Pte Ltd, a Singapore- based data specialist. Here, he draws on his experience in the wealth management space to highlight how bad data costs the trust administration industry in particular - and how fantastic the upside can be when information is fit for purpose. The editors are pleased to share these comments and invite readers to jump into the debate. The usual editorial disclaimers apply. Email tom.burroughes@wealthbriefing.com and jackie.bennion@clearviewpublishing.com      

Trust administrators are under increasing pressure to adopt new digital technologies to support their clients. The younger generation no longer expects to meet in oak-panelled offices with dark green carpets. They’ve been brought up as digital natives, and the expectations created by Uber, Amazon, and Apple are raising the customer experience bar for every other company this generation deals with. New experiences are demanded by the new generation, and those slow to react may lose an entire generation of business. 

In conjunction with this generational shift, we see increasing regulatory scrutiny placed on companies in the space. Whether it is privacy-related, like GDPR, or compliance- related, like AML and KYC checks, these reporting obligations are forcing providers to automate processes. There’s a myriad of technology out there to help, yet the process of digital transformation has been slow.

The challenge for many trust administrators is the data they have on hand to support this digital transformation. No one would dream of establishing a trust without clear rules, roles, principles and guidelines for how the administrator will handle the assets within that trust. Yet trust administrators have been slow to adopt good governance practices with the data they hold about their customers and assets. The result of this is that migrating to newer technologies is fraught with risk, exposing a lack of consistent, coherent, timely and reliable information about their customers.

Accruing “data debt”
In short, trust administrators have racked up “data debt.” Data debt is accrued whenever you permit an action that captures, updates or deletes data that increases future costs associated with using or storing that data. 

A simple example of data debt could be installing a new CRM. The intention is great - automate manual processes, streamline reporting and improve efficiency. But without formal rules on what data can and should be captured, what each field means and the quality expectations for information stored within it, and whether the field contains personally identifiable information, the company is racking up data debt. 

Months or years after that CRM is installed the debt becomes due. You now need to report under GDPR, but can you easily document which customers this applies to? Can you show where you acquired your data, and which reports or employees have access to it? How much effort would it take (and what might it cost) to let one of your customers exercise their “right to be forgotten”? Badly documented data leads to misunderstanding and additional effort at a later date. This is when you pay back your data debt. 

A tangled mess of different systems causes data debt in different ways. Is the information in your CRM up to date with the info in your billing system? If not, you could be over- or under-invoicing. Over-invoicing will cause client distrust; under-invoicing may never be seen, but it costs you just as much in lost revenues.

What can be done about this data debt?
Data governance exists to solve the problem. It’s about exerting executive authority over business information. Get someone in the senior leadership team to spearhead this initiative (not your CIO), as you will need political clout to force the changes through.

Your first order of business is to establish the cost of poor data today and prioritise areas for improvement. How good is your customer data? How frequently do you get complaints about bills? How easy is it for your team to pull up information about their customers, or respond to a regulatory request for more information?

Once you know where the pain is, you need to set up some principles about data to get your business to treat it with more care. A common one is: “We want to treat data as an enterprise asset.” By treating your data in the same way as you would treat the funds you manage on behalf of your company or your clients, you’re giving it the respect it deserves.

Establish a Data Council to “own” the data and ensure that it’s going to be well managed. Data owners are usually senior leaders in the business who feel pain when the data is poorly managed (e.g. the finance director when invoices go unpaid). They should be accountable for the quality of the data in their domain.

To help these senior managers out, appoint data stewards. These are the subject matter experts who understand the data on a day-to-day basis, and can spot when it’s not right. Get them to be responsible for the rules concerning the data that you use.

Lastly, bring in your IT experts to enact the policies and report on the data quality rules. They will be able to integrate information across your business and ensure that it stays high quality over the long term.