The Better Organized We’re from the Beginning, the Easier it Is to Use Data — BNY Deputy CDO

(US & Canada) Linda Powell, Deputy Chief Data Officer at BNY, speaks with Jack Berkowitz, Chief Data Officer at Securiti, in a video interview about the role of data governance at BNY, regulation of new technologies, the importance of data management, the BCBS Standard 239 and need for such best practices, and maintaining data ethics.

The Bank of New York Mellon Corporation, commonly known as BNY, is an American international financial services company headquartered in New York City.

Here are a few vital takeaways from the interview:

On the role of data governance:

1. "We look at data governance as an enabler to moving faster rather than a bunch of rules that people have to follow arbitrarily. It’s not just a compliance checkpoint; it’s actually the springboard to business advantage."

On data management efficiency:

2. "The better organized we are from the beginning of the process, the easier it is to use the data. Especially as we're entering a new world of AI and machine learning, organizing our data effectively allows us to spend less time wrangling data and more time on analysis."

On regulatory challenges:

3. "It’s important to understand how we are allowed to use data. Having visibility into the rights of using data in our models is 90% of the need. We must comply with vendor contracts and regulations, but we also need to think about how we should ethically use that data."

On data ethics:

4. “Before the surge of Gen AI, we had already started developing our data ethics framework. This proactive approach has made it easier for us to navigate new challenges as they arise, ensuring we have the right guardrails in place.”

On the importance of best practices:

5. "Regulations and standards like BCBS 239 should be viewed not as barriers, but as essential frameworks for running a successful business. Good data management and reporting practices benefit everyone in the organization."

BNY is invested in leveraging data governance as an enabler to drive and build commercial products faster, says Powell. She adds that the bank has been striving to minimize costs and reduce risks by embedding privacy and data governance into the product life cycle since inception.

Drawing on her experience with the regulation of new technologies and working with banking regulators, Powell emphasizes that emerging technologies are empowering leaders like herself to streamline governance and compliance efforts.

For instance, she mentions metadata, describing it as data for data. Using a soup-can analogy, Powell states that the label on the can with the nutritional value is metadata. The existing tools help in managing metadata, making it easier for end-users to understand what data they have in order to work with it. She maintains that in the age of model management, AI, and ML, the better the data is organized from the beginning, the more convenient it is to use the data and perform analytics on it.

When asked to shed light on the Basel Committee on Banking Supervision Standard number 239 (BCBS 239), Powell describes it as a global banking organization that sets guidelines and standards for how banks around the world should operate. Further, the standard is specific to risk data aggregation and reporting.

Elaborating, Powell says that BCBS advocates having basic hygiene for data and report management, keeping in mind the whole range of risks. BNY has embedded all of the data requirements mentioned in BCBS 239 in its core data management policies, she affirms.

Furthermore, Powell asserts that BNY treats the entire gamut of organizational data used for management, regulatory reporting, and decision-making with the utmost care — from confirming whether it is coming from an authoritative source to having data quality controls around it to know how it is being used.

Apart from these best practices, the BCBS 239 principle also mentions good reporting governance and understanding the audience for whom the report is being created. According to Powell, it is critical to ensure that the controls are in place while automating the report and adds that BNY also keeps an inventory of the reports.

Moving forward, Powell states that understanding how one is allowed to use that data is imperative. Whether it is about complying with all of the license agreements and contractors, there are laws around how some of the data should be used.

Also, knowing how the data can be used is equally important as knowing how the data should be used. Therefore, the bank has put a massive focus on data ethics.

In addition, Powell shares that BNY had started putting together its data ethics framework and its approach toward data used for analytics before GenAI disrupted the system. Having guardrails up from the beginning and addressing the controls that should be in place made it easier to cope with the onslaught of GenAI, she concludes.

CDO Magazine appreciates Linda Powell for sharing her thoughts with our global community.