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The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

The Chief Data Officer: Here to Stay or Just a Flash in the Pan?

Remember when the acronym CDO referred to collateralized debt obligations, a fancy type of credit derivative?

Well, think again. CDOs are now chief data officers, C-level executives charged with the corporate ‘ownership’ of a firm’s data assets (although quite where that leaves chief information officers isn’t yet clear….). The implication is that CDOs sit with other C-level types on a financial institution’s executive management committee and make sure that a firm’s most valuable asset – after its people, of course – is well maintained and used to best advantage. So far, so good.

If it’s true that data is such an important asset, why shouldn’t its interests be represented at the C-level? After all, operations and technology officers have long been prefixed with the C word. Indeed, John Fleming, in an article abstracted here on Page 9 from a piece that originally ran in our new A-Team IQ magazine, points out that without buy-in at the very highest levels of the enterprise, the prospects for any enterprise data management project are really quite dim. And yet, as we reported last month, recent research suggests that although spending on EDM projects is expected to reach some $1.67 billion this year, most financial institutions have no plans to install a data officer at the C-level.

Why is that? The question was put to a panel of data experts at a recent London seminar on risk. The panelists agreed that ultimate data ownership should rest with the business owner, rather than with any specific data chief, and that the institution’s data function should be responsible instead only for procesess, like data management and checking data quality. The panel suggested that the role of a CDO is untenable, simply because no single person or function can know, own or be accountable for the extraordinarily broad array of data that financial institutions draw upon for their daily operations.

Does that relegate the CDO function to the conference circuit, where we seem to see so many of them ply their trade? Or do they have a role to play in getting EDM projects off the ground and, indeed, completed according to spec? We’d like to think it’s more the latter than the former. But, in essence, there seem to be three roles emerging here. As a C-level executive, surely the main function of a chief data officer is to ensure the processes around data collection, storage, maintenance and access result in high-quality, accurate, up-to-date and ‘defensible’ corporate information? Ownership here could continue to lie with the business lines, where – as our plucky panel points out – the specific vertical expertise resides.

A second role is in navigating that EDM project through the political minefield that all invariably face. Change on this scale always meets resistance. A C-level exec can have a C-level conversation that can keep a project moving, even in the face of the worst intransigence. And finally, yes, that conference circuit role is an important one. Externally, we’ve seen a group of ‘usual suspect’ protagonists evangelize on their new-found roles. These guys believe they are furthering the cause as trailblazers in this area. And they are right. The external conference circuit is a mirror image of the internal corporate meeting circuit that our new breed of data officers is forced to endure in order to keep their projects moving, or indeed to get them off the ground at all. CDOs aren’t for everyone. But they have their place.

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