Information governance in finance and insurance: A strategic imperative

Executive summary

The financial services sector generates vast volumes of data daily—from transactions and claims to digital interactions. Yet, without a strategic approach to information governance, this data can quickly shift from an asset to a liability.

Built on a foundation of trust, the finance and insurance industries are facing increased pressure to maintain that trust by protecting data while leveraging its value.

In response, firms are transforming their data stewardship, treating information governance as a business imperative. The stakes are high. Organizations without robust information governance risk not only regulatory penalties and reputational damage, but also a diminished competitive edge.

The data deluge challenge

Financial institutions operate in complex ecosystems. Data flows from multiple sources: customer transactions, market feeds, regulatory reports, social media interactions, Internet of Things (IoT) devices, and third- party partnerships. This data explosion has created significant challenges.

Consider a typical large bank that processes millions of transactions daily. It must capture, store, analyze, and retain terabytes of structured and unstructured data—meeting various regulatory requirements across different jurisdictions. The cost of mishandling data continues to escalate.

Low-quality data can cost companies up to $15M per year, and incorrect or siloed data can cause inefficiencies resulting in 30% annual revenue losses.¹

Information trapped in departmental systems prevents enterprise-wide visibility and hinders the ability to make smarter decisions. Without reliable access to accurate data, organizations cannot drive effective business analytics, AI implementations, and other initiatives.

Legacy systems, some dating back decades, often cannot integrate with modern technology platforms—creating gaps in data lineage and problems with quality control. Adding to these concerns, there’s a need to bring staff up to speed and expand collaborative data stewardship across the enterprise. Compounding these challenges is a gap in soft skills, as staff need to adapt to new tools and practices. This lack of alignment hinders effective collaboration and enterprise-wide data stewardship.

With so much data and inadequate information governance, organizations cannot answer fundamental questions: Where does our data reside? Who has access to it? How accurate is our data? How long should it be retained?

However, there is a way for the financial services sector to achieve a transformation that answers such questions and delivers distinct business value.

1. Datavid, The real cost of data silos? Here’s a breakdown [2023], 2022