MAS’ New Guidance on Data Governance and Management: How to Respond

On May 29, 2024, the Monetary Authority of Singapore (MAS) issued new guidance on Data Governance and Management Practices for banks and financial institutions. This guidance stems from MAS’s inspections and aligns with the Basel Committee's principles for effective risk aggregation and reporting. It calls for stronger data governance frameworks to ensure robust data management controls, particularly in risk aggregation and reporting.

The key takeaway? Banks in Singapore need to ensure board-level oversight of data governance, regularly updating boards on data quality and issues that impact financial and risk reporting. Many banks already have data management offices, but MAS stresses the need for clear roles and mandates for these offices to monitor and measure data quality.

In this blog, we’ll walk through the new guidance from MAS and share best practices for how banks can prepare for and respond to this critical directive. 

Key issues and MAS recommendations

MAS inspections revealed critical issues in many financial institutions, including:

• Inconsistent and incomplete data

• Weak board oversight in data governance

• Siloed data systems that hinder risk data aggregation

• Inadequate data quality management leading to inaccurate reporting, especially in the context of regulatory compliance frameworks like BCBS 239

To address these gaps, MAS recommends:

1. Board and Senior Management Oversight: Boards must actively oversee data governance practices.

2. Data Quality Management: Implement robust data quality controls, including automated validation and reconciliation.

3. Clear Governance Structures: Establish governance councils and a stewardship framework to ensure accountability.

4. Escalation Mechanisms: Establish processes for quickly addressing and correcting data issues.

In the next few sections, we’ll reveal how Alation’s data catalog can be an essential tool for banks seeking to comply with MAS’s guidance. The Alation platform helps organizations define and enforce a data governance framework by identifying key users, mapping stakeholders to information assets, and establishing accountability. Alation also offers automated data lineage to track the lifecycle of critical data elements and provides transparency into how data is transformed across systems.

BCBS 239 and the role of a data catalog

BCBS 239, or the "Basel Committee on Banking Supervision's Principles for Effective Risk Data Aggregation and Risk Reporting", is a regulatory framework that sets out guidelines for banks to improve their risk data aggregation capabilities and risk reporting practices. Its primary goal is to ensure that banks can produce accurate, timely, and comprehensive risk data, which is crucial for managing financial risks and making informed decisions, especially during times of stress.

​​The Monetary Authority of Singapore’s (MAS) 2024 guidance on data governance and management aligns closely with the principles of BCBS 239. MAS has taken a more focused approach to data governance, emphasizing key areas of improvement that many banks in Singapore still need to address. Both share common goals around strengthening data governance, improving data quality, and ensuring accurate reporting.

Alation helps leading financial services organizations across the globe to establish a solid foundation of trust in data across the organization. Data consumers are empowered to find, understand, and use data with confidence, knowing it is well-governed and aligned with the compliance standards. Alation’s platform supports compliance with BCBS 239 by:

• Helping organizations define and enforce their data governance framework in a simple and automated manner. 

• Automatically ingesting metadata from enterprise applications, creating a centralized catalog of critical data elements.

• Providing granular technical and business lineage for transparent reporting.

• Monitoring data quality metrics and flagging issues in real-time for rapid escalation.

• Supporting the definition and management of critical data elements (CDEs) for risk data reporting

• Helping validators from an auditing standpoint

By providing a comprehensive view into Critical Data Elements (CDEs) Alation helps businesses comply with critical regulations.

Let’s explore the other ways in which a data catalog can help bank leaders in Singapore respond to MAS’ new imperative.

How a data catalog can help banking leaders report on governance metrics

One issue highlighted by MAS was the lack of detailed reporting on data quality across business units (BUs) and support units (SUs). Alation helps document key data risk indicators, enabling organizations to collaboratively define data quality policies with input from all stakeholders. It provides visibility into critical data issues, flags them for the relevant teams, and ensures that the workforce is trained and compliant with established policies. This can be applied across all business units, reducing the risk of unnoticed low data quality scores.

Alation also overlays the data quality scores on the lineage graphs, ensuring users have visibility on key issues impacting business functions:

Alation’s Data Quality processor empowers business users with DQ metrics from Databricks or Snowflake in a single, consistent view within Alation

US financial services company Oportun used Alation to enhance data governance and compliance reporting by identifying key data users as stewards responsible for managing sensitive information and regulatory compliance. Their Data Management and Business Intelligence team created a self-service model for SEC reporting, replicable for other state compliance needs as the company expands. By capturing critical SEC metrics in a single catalog article, protected through strict permissions, the bank ensures data accuracy and security. Trust Flags further inspire confidence in the data, allowing leaders to focus on business strategy rather than data quality.

Addressing data lineage with a data catalog

MAS found that many banks have incomplete data lineage, with gaps in end-to-end tracking. Alation’s platform offers a holistic, detailed view of data lineage, including technical and business layers, and can enrich data lineage with data quality overlays and policy indicators. This enables banks to maintain complete and accurate lineage tracking for critical data elements, ensuring compliance with regulatory requirements.

Alation's business lineage feature simplifies lineage to ease comprehension for business users.

For example, Singapore’s GXS Bank relies on Alation’s lineage capabilities to trace back source tables and understand downstream impact as part of enabling users to better understand and discover their data assets.

Improving data quality with a data catalog

MAS observed that many banks use generic thresholds for data quality, which may not reflect the unique importance of certain data fields. Alation allows banks to customize data quality thresholds, ensuring more critical fields like customer names receive higher scrutiny than less critical ones. It also helps aggregate data quality results across units, providing a complete view of data quality performance at the entity level:

Each business's data quality needs are unique, depending on its goals, industry, and data use cases. For this reason, businesses need the freedom and flexibility to partner with data quality vendors best suited to their needs. Alation has partnered with a range of best-in-class data quality vendors to support its Open Data Quality Framework so that customers can easily integrate the DQ solution of their choice into the data catalog. 

Conclusion

The Monetary Authority of Singapore’s new guidance emphasizes the importance of strong data governance practices. For banks, adopting a comprehensive data governance framework is essential to comply with these new standards – and to take advantage of new AI initiatives, which require trusted data and repeatable, transparent processes (which data governance supports).

Alation offers a powerful platform to help banks streamline their governance efforts, ensuring data quality, transparency, and accountability at every level. From automated data lineage tracking to real-time data quality monitoring, Alation is the ideal solution for banks looking to meet the MAS’s new data governance expectations and future-proof their operations with robust data management practices.

Are you keen to learn more about how Alation can help you achieve compliance goals? Schedule a demo with us today.