Welcome to Hilltop Views and thank you for taking a few minutes from your day to read the first post to our Company’s blog. The Hilltop Companies’ leadership team will use this space to share our insights on events and changes in the financial services industry, the implications to industry stakeholders and actions to consider. We pledge to be timely, concise, relevant and informative with our viewpoints. We’ll update this blog every three weeks.
Some of the topics you will see in the coming weeks include:
- Regulatory plans and actions from federal and state agencies regarding banking, capital markets, mortgage lending, real estate, etc., and implications for financial services industry stakeholders
- Advances in audit and compliance practices and technologies and cost-effectively implementing such programs to evidence compliance and manage regulatory risk
- Trends and innovations in operations, technologies, data and training and actions that stakeholders can take to capture new opportunities, better manage risks or improve efficiency.
- Mortgage Industry structure shifts, e.g., GSE Reform, and steps stakeholders can take to provide options for operating successfully in a range of outcomes.
We will offer views spanning the gamut of strategic options to practical, tactical action steps to move your day-to-day business forward.
I’ll start on the first topic – Data and Data Quality.
As professionals, we want data when looking at business opportunities and challenges. We also want lots of it but targeted, different types, different views… We want operational data, financial data, customer or supplier data and, in the lending industry, loan data, etc. We extract it, combine it, manipulate it, think about it, report it, take action based on it and in some cases, a la Enron, make it up. I added the last example for a specific reason. That is, how do you know if your data is reliable for making decisions and taking action?
Why is understanding the quality of your data important? There are several reasons that may seem obvious to many but I get asked that question more frequently than expected. Those reasons include:
- Understanding the quality, or reliability, of the data helps the decision maker assess the risks of taking certain actions based on the data. As an executive, the top reason to me is that someone will take action on the data. Measuring data quality provides that context.
- In second place, auditors and regulators constantly ask, “How do you know? What is your evidence?” I’ve seen examinations where the integrity of the data came into question, casting doubt on management’s actions. Managers know that’s a bad position to be in. Measuring data quality aids in audits and examinations. Auditors look at data reliability from two perspectives – completeness of the data and accuracy (without both – auditors cannot get “comfortable” with the evidence they are presented with).
- As professionals, we constantly strive for improvement. In the financial services industry and government financial sector agencies, improvement in data quality is always high on management’s list. Measuring data quality takes improvement from an aspiration to a reality.
So, let’s move to a discussion on how to measure and, if necessary, improve data quality. And that’s right where we will pick up in 3 weeks. For now, the rest of my life is calling.
