Implementing standardized data controls across systems can simplify the audit process and monitor data quality for improved data governance
Pay closer attention to the systems that manage compliance, or be prepared to pay-up.
That’s according to a recent articleby the Wall Street Journal, reporting that the lack of integration between systems that manage compliance is driving up the cost of business.
The article cites an ADP and CFO Research survey, stating that 78% of respondents found a lack of integration between the software systems and applications they use to manage compliance increases their compliance costs. The cost of this complexity erodes margins and puts organizations at risk of losing a lot more if they fall out of compliance – and insurance is no exception.
Focusing on Data Quality
As increased regulatory oversight and new business models change the marketplace – adding challenges to business operations for insurers – companies are looking for ways to simplify the audit process and avoid cost hikes.
However, there’s a solution that will put insurers’ minds at ease: an increased focus on data quality. While the importance of data quality is not new to compliance officers, the need to systematically integrate data controls for improved data integrity is something that has been a challenge to execute. Not doing so causes costly fragmentation – a clear challenge facing the industry today.
Without an effective data governance framework in place, disparities between systems can subject insurers to issues that compromise business data overall. Disparate systems can result in:
- Increased Risk: Incomplete and inconsistent data across multiple data systems
- Poor Decision Making: Duplicate or invalid data that dilutes the reliability of information
- Operational Delays: Lessened ability to monitor dynamic data, causing slowed timelines
- Data Governance Gaps: Reduced visibility into operational data quality
But too often companies don’t see the advantages of an integrated data controls solution. The survey states that 50% of companies still relied on multiple, separate information systems or manual processes to manage compliance. Connecting the dots between the data within these systems is paramount to success.
What could insurers gain from integrated data controls
The truth is, insurers can and must have improved experiences with the software that supports compliance efforts. They cannot afford the inefficiencies of poor performance or the inability to assess the results of technology.
If one third of survey respondents disagree with the statement, “The systems my company employs for compliance activities are easy to understand and use,” then the reason for many challenges in the compliance space could be solved with the right technology – and the need is great. For technology to truly work for compliance, companies need to perceive their solutions as an integral part of the process: easy to use with clear outcomes that help improve business.
Implementing data controls across the insurance enterprise streamlines complex processes, cuts costs and reduces risk, all of which helps minimize the issues that plague compliance departments today. Data controls, when implemented properly, deliver visibility and real-time validation to ensure the accuracy of an organization’s data as it moves across different systems and exchanges hands. Doing so makes data dynamic and reliable no matter where it resides.
When insurers can see the direct impact of controls more clearly – using them competently or relying on a trusted advisor to help understand the process – companies will see an increased reliance and stronger dependence on controls to help them improve business operations. Rather than serving to frustrate an already complex process, the right software can truly be an ally to companies seeking to standardize compliance activities.
As part of an effective data governance strategy, data controls deliver competitive business advantages to insurance companies searching for a way out of the knotted complexity of the compliance process. With the right data controls solutions, insurers can realize improved business performance, deriving competitive advantages from the benefits of an integrated approach to data quality standards across complex insurance systems.