Risk management is a critical component of any good business strategy, especially in today’s technology-centric society, where many risks surround digital assets such as a company’s data. In fact, data represents a major source of risk for most businesses. Fortunately, though, risk management services can help promote more effective data governance practices.
Risk management efforts will affect virtually every aspect of a company and its operations. This provides a great opportunity to evaluate and improve your processes, practices, protocols, and procedures. This rings true for all forms of risk that an organization is confronting.
What Do Risk Management Services Entail?
To understand exactly how risk management services can be leveraged in a way that improves data governance practices, you will need to have a handle on what these services entail.
Risk management services involve the identification of risks, in addition to the development and implementation of mitigation strategies. Some risk management service providers also offer ongoing monitoring whereby they look for new emerging risks and regulatory changes that are associated with previously-identified problem areas.
These service providers typically use a risk management software platform as a virtual base of operations. These comprehensive systems can be very effective for organizing and executing a response to identified risks.
What is Data Governance in Risk Management?
Data governance refers to the practices and processes associated with data management. This can include a company’s data handling practices and policies, data storage, and encryption practices, along with data collection and deletion practices.
When examined relative to risk management, data governance brings to mind the General Data Protection Regulation (GDPR). This is an EU-based regulation that applies to any organization that does business with a citizen of a European Union nation. GDPR has stringent regulations related to data governance, including “the right to be forgotten” — a regulation whereby an organization is required to delete or “forget” an individual’s data upon request.
GDPR also addresses data collection and data storage practices. The risk lies in the potential for tremendous GDPR fines, which can amount to $20 million or 4% of total worldwide turnover for the prior fiscal year (whichever is greater.) This is just one example of a data governance risk that impacts countless companies worldwide.
How Do Risk Management Services Impact Data Governance?
Data is one of the most valuable assets an organization may possess. It’s also at the core of many risks. This means that data governance becomes an integral part of many risk mitigation efforts.
Data-related risk can take many forms, including some of the following.
Regulatory Risk and Your Data – Data is involved in many regulatory risks and very precise data handling practices are often required in order to achieve full compliance. For example, data auditing may be necessary in order to prove compliance with a rule or regulation. This is particularly commonplace in highly-regulated industries, such as the financial and health care sectors.
A good risk management service provider will identify regulatory risks, determining what data governance measures should be in place as part of a mitigation plan — one that simultaneously promotes full compliance. Data collection, storage and auditing issues are among the data governance-related issues that you can expect to be addressed. The net effect: an organization’s data governance practices are enhanced as part of their risk management efforts.
Data Breaches and Ransomware – Ransomware and data breaches are a very real threat to companies both large and small. As such, you can expect that this will be a key focal point for any good risk management service provider. Cybersecurity measures and data storage practices will be addressed as part of a risk mitigation strategy; they are also integral parts of the data governance landscape. Therefore, this is another example of how a company’s risk management initiatives will benefit their data governance practices.
Data Corruption and Data Loss – Losing critical data or discovering that your data is corrupted and unreliable can be devastating to an organization. This is especially true in the case of mission-critical data stores. Data loss and corruption represents a major risk, making this threat a common point of focus for risk management service providers. Effective risk mitigation demands the implementation of good data governance practices such as frequent data backups and appropriate security measures that will guard against intentional sabotage (amongst other things.) This is yet another area where a business will see positive data governance impacts arising from their risk management service provider’s efforts.
Designing Data Controls as Part of a Data Governance and Risk Mitigation Strategy
Good data controls can go a long way toward improving your data governance; these controls can also represent an important aspect of a company’s risk management strategy.
A key component of a data governance approach, data controls are — in large part — designed with risk in mind. Data controls are processes and procedures that are executed on a regular basis with an intention of maintaining data integrity. Three common data controls are as follows.
- An investigation control will examine and identify problems that exist within your data. For example, an investigation control with profiling capabilities may identify a region of corrupted data because it no longer carries the proper format.
- A correction control will address issues that exist within a data set. For more sophisticated problems, you can configure alerts that notify an IT system administrator of the problem so that they can take action to correct the issue.
- A guard control keeps watch over incoming data, whether it’s via a sync or a one-time migration effort. Also called a preventative control, this control can interfere with the ETL process to block corrupted or low-quality data from entering a database. A guard control can also be used with manual data entry processes.
These data controls work in tandem as part of a data governance system. When implemented correctly, you will see some significant data-related risk reductions too. That is a win-win outcome, to be certain.
As a whole, risk management efforts promote good governance practices within an organization with a high degree of efficacy. You are essentially closing the gap that exists between day-to-day operations and the company’s strategic initiatives by taking action. Additionally, risk management initiatives promote greater awareness within an organization’s leadership, resulting in strategic and operational advantages.
At iTech, we have experienced risk management experts who deliver cost-effective risk management solutions to clients in a variety of business sectors. Contact iTech today to discuss your organization’s risk management needs and find out how we can help advance your data governance efforts while simultaneously reducing risk.