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Master Data Management (MDM) for Financial Services

Master Data Management (MDM) has a lot of common considerations regardless of the industry where it will be blueprinted and implemented, but there are some key aspects to consider specifically for a given industry.

A recent blog post here on the blog examined the specialties of doing Master Data Management (MDM) in the manufacturing sector. The post was called 4 Key Aspects of Master Data Management in Manufacturing

In this post, two specialties of MDM in the financial service sector will be examined. These are the impact of regulations and data domains in focus.

The Impact of Regulations

Doing business in the financial service sector is heavily impacted by the various regulations enforced by authorities across the globe. These regulations aim at improving market confidence, financial stability, and consumer protection which stretch across concepts such as Know Your Customer (KYC), Anti Money Laundering (AML), and many more. Executing data management in the financial services sector revolves around adhering to these regulations and the embedded concepts.

When implementing a Master Data Management (MDM) solution in the financial sector you will need a broad set of capabilities that cover:

  • the traditional goals of managing master data, for example getting a Single Customer View (SCV)
  • the specifics of what is entailed in and demanded for Knowing Your Customer (KYC)

Data Domains in Focus

In Master Data Management we often focus on three major data domains: Customer master data, supplier master data, and product master data. These domains are also relevant for Master Data Management in financial services, however, often with a different meaning, naming, and additions.

The customer is king in any business. In financial services, a customer is often regarded as one of several different party roles that are involved in business processes. The customer can be one of many counterparties involved in transactions taking place. Therefore, we see the party domain being more naturally accepted by business stakeholders in financial services than we tend to see in other industries.

From Master Data Management to Data Hub Strategy

The requirements for Master Data Management in the financial services sector early in the journey lead to solutions that must be able to encompass Extended Master Data Management. This can also be seen as a data hub strategy where data quality and data governance play a crucial role. 

You can learn more about these considerations in a webinar co-hosted by Semarchy with participants from Sumitomo, HSBC, and Bloomberg discussing data quality and governance.