New draft banking guidelines aim to strengthen data governance

China's top banking regulator issued draft guidelines on Friday, with the aim of leading banks to strengthen data governance to ensure the authenticity, accuracy and comprehensiveness of data for better risk management.

"Currently, the data of banking institutions lack accuracy, comprehensiveness and timeliness. These quality problems of data have prevented banks from heading toward high-quality development and have affected the regulatory efficiency," said the China Banking Regulatory Commission in a written explanation for the latest guidelines posted on its website.

For many banks, the function of data governance is scattered among various departments, which will create ambiguity in power and duties, so banks must have unified data management, the CBRC said.

Apart from requiring banking institutions to comprehensively enhance the quality of data, the regulator also said, "Banks should integrate data application into the entire process of their business operation, risk management and internal control to effectively capture risks, optimize business procedures, and improve the effectiveness of internal control.”

By issuing the draft guidelines, the CBRC said it hopes to lead banking institutions to establish and improve their data governance structures. It also made clear that the bank’s board of directors takes ultimate responsibility for data governance and that banks should build accountability mechanisms that can go as high as the level of senior executives.