A data silo is a collection of data that’s either inaccessible or difficult to access by other groups within an organization. This is a real problem when handling compliance. Customer data, including identifiable and contextual data, can easily become separated from the transaction data that compliance officers review every day.
Data silos are becoming increasingly problematic as data begins to proliferate and transform every organizational process, making it more difficult for teams to carry out critical functions.
Siloed data is stored in a standalone or isolated system often because it’s incompatible with other datasets. Although the intentions of storing data in this way usually aren’t malicious, it does make it harder for it to be leveraged for the organization’s benefit.
Why are data silos bad for compliance?
Although they may sound harmless, data silos hinder operations and the data analytics processes that support them. Not only do they limit the ability of leaders to use data to manage operations and make informed decisions, but they also prevent operational workers such as compliance officers from accessing relevant information easily that could help them meet their objectives more efficiently.
This is commonly seen when investigating flagged transactions and trying to match customer activity with customer identifiable information obtained during the Know Your Customer (KYC) process. Often this set of data is separated from transactions requiring compliance officers to switch between multiple screens and even multiple platforms to obtain the contextual information they need to make a judgement.
In short, siloed data is unhealthy data. If it cannot easily be accessed and used in a timely manner, it cannot be trusted when it’s eventually released, it isn’t adding any value to operational processes, and it makes data governance more difficult or in some cases impossible—this is something you must be on top of now, at a time when regulatory bodies are introducing new data governance laws and severe penalties for noncompliance.