6 Benefits of Data Lineage for Financial Services

The financial services industry has been on a journey to modernize its data governance for over a decade. But as a global economic downturn inches closer, the need for the highest level of governance becomes increasingly urgent. How can banks, credit unions and financial advisors comply with challenging regulations while battling limited budgets and high staff turnover?

The answer is data lineage. We’ve put together six top reasons why financial institutions are turning to a lineage platform like Manta for data management.

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1. Automated impact analysis

In business, every decision you make affects your bottom line. This is why impact analysis is important. It predicts the outcome of a decision. How will one decision affect your customers? Stakeholders? sales?

Data lineage is helpful during these investigations. Genealogy creates an environment where reports and data can be trusted, so your team can make more informed decisions. Data lineage provides this stability and more.

One area that is often overlooked in impact analysis is IT resilience. This blind spot became apparent in March 2021 when CNA Financial suffered a ransomware attack that caused widespread network outage. The company’s emails were hacked, consumers panicked, and CNA Financial was forced to pay a record $40 million in ransom. This is where genealogy-assisted impact analysis comes into play. When a threat arises, you want to be prepared to deal with it and know exactly how much your business will be affected.

IT resilience is also threatened by natural disasters, user errors, infrastructure failures, and cloud transitions. In fact, over the past two years, 76% of organizations have experienced an incident that required an IT disaster recovery plan.

Most organizations struggle to perform impact analysis manually, as it requires significant resources. However, with Manta’s automated lineage, the financial institution saw a 40% increase in engineering team productivity after implementing lineage.

2. Improve data pipeline visibility

As discussed above, there are countless threats to an organization’s bottom line. Whether it’s a successful ransomware attack or a poorly planned cloud migration, it’s always cheaper to catch problems before they occur.

This is why data pipeline observability is important. This protects not only your organization, but also the customers who trust you with their money.

Data lineage expands the scope of data observation to include data processing infrastructure or data pipelines in addition to the data itself. This expanded observability allows you to prevent incidents during the design phase or identify them during implementation and testing to reduce maintenance costs and increase productivity.

By creating complete lineage, Manta customers have been able to trace data-related issues to the source 90% faster than their previous manual approach. According to Manta research, this means the team responsible for a particular system can resolve any issues within minutes.

3. Regulatory Compliance

The financial space is highly regulated. Institutions must comply with regulations such as Basel III, SOC 2, FACT, BSA/AML, and CECL.

All of these regulations require accurate data tracking. Your organization must be able to answer the following:

• Where did you get that?
• How did you get there?
• Can you prove this with up-to-date evidence whenever you need it?
• How many weeks or months will you need to complete the report?
• Can the report be completely trusted?

Data lineage helps answer these questions by creating highly detailed visualizations of data flows. These reports help you accurately track and report data to ensure compliance.

4. Efficient cloud migration

McKinsey predicts that by 2024, $8 out of every $10 in IT hosting costs will shift to the cloud. In finance, 40% of banks and 41% of credit unions have already deployed cloud technology.

But if you’ve ever been involved in a data system migration, you know how complex the process can be. Approximately $100 billion in cloud funding is expected to be wasted over the next three years, and most companies cite migration-related costs as a major impediment to cloud adoption. Because every system consists of thousands or millions of interconnected parts, and migrating everything in a single step is impossible, the process is too complex and expensive.

Splitting the system into smaller chunks of objects (reports, tables, workflows, etc.) makes it easier to manage, but it raises another problem: how to migrate one part without breaking the other parts. How do I know which parts can be grouped together to minimize the number of external dependencies?

With data lineage, all objects in the migrated system are mapped and dependencies are documented. Manta customers use data lineage to complete migration projects 40% faster with 30% fewer resources.

5. Improve workflow and maintain IT

Data engineers, developers, and data scientists continue to be fast-growing and difficult-to-fill roles in technology. The data engineering talent shortage has grown from a problem to a crisis, made worse by the increasing complexity of data systems. You don’t want to continually overtax your valuable data engineers with routine, manual (and inconvenient) tasks like tracking data incidents, assessing the impact of planned changes, and answering the same questions over and over again about the origins of data records.

Data lineage automates routine tasks and enables self-service where possible, allowing data scientists and other stakeholders to retrieve up-to-date lineage and data source information on their own whenever they need it. Additionally, detailed data lineage maps help accelerate data engineer onboarding, allowing you to integrate new or less experienced engineers into the role without compromising the stability and reliability of your data environment.

6. Trust and data governance

Data governance is not new, especially in the financial world. The Basel Committee published BCBS 239 in 2013. The regulation was intended to strengthen trust in data by strengthening banks’ risk-related data aggregation and reporting capabilities.

Report developers, data scientists, and data citizens need trusted data to make accurate, timely, and confident decisions. However, today’s complex data environments involve disparate servers and infrastructure, resulting in disparate data sources and countless data dependencies. You need a complete overview of all data sources to see how data moves throughout your organization, understand all touchpoints, and see how they interact with each other. You can only fully trust your data if you fully understand it.

Data lineage provides a comprehensive overview of all data flows, sources, transformations, and dependencies. Ensure accurate reporting, see how important calculations are derived, and gain confidence in your data management framework and strategy.

Why Manta is a good fit for data lineage in financial services

Manta has helped dozens of clients in the financial sector realize the benefits of data lineage. We bring intelligence to metadata management by providing automated solutions that help you increase productivity, gain trust in your data, and accelerate digital transformation.

The Manta platform includes unique features to help you get the most out of your genealogy with over 40 ready-to-use, fully automated scanners. Manta also works with the most popular data catalogs. Our platform integrates with catalogs like Collibra, Informatica, Alation, and more.

Don’t wait. Realize the benefits of automated data lineage today.

To learn more, schedule a demo with a Manta engineer.