A Deep Dive into Data Catalogues
Catalogues, lakes or warehouses?
Data lies at the heart of the financial markets, providing the fuel for efficient and successful operations. Investors and financial firms with access to the best quality data – in terms of its completeness, timeliness, and accuracy – have an advantage over those less well informed.
With vast amounts of critical data held within a financial firm’s database, it is vital that this data is stored in a way that ensures easy accessibility and navigability for employees.
One way in which this can be done is through a data catalogue. A data catalogue is a centralised repository that provides a comprehensive inventory of an organisation's available data assets, along with detailed metadata about those assets. Metadata refers to ‘data about data.’ For example, an investment manager may have purchased multiple sets of data about the automotive industry, and derived an internal set of data based on the purchased data. The metadata may indicate that the new data set was generated by a team, but also that it was derived from purchased automotive data.
In managing their data, financial firms may question the difference between data catalogues and more traditional data storage methods such as data warehouses and data lakes.
The key difference between a data catalogue and a data warehouse or data lake is that a data catalogue provides a centralised inventory and metadata management system for an organisation's data assets, regardless of where the data is stored. While a data warehouse or data lake serves as the central repository for structured or unstructured data respectively, a data catalogue goes beyond just storing the data. Data catalogues perform several functions, such as:
Data Inventory: Providing a comprehensive inventory of all data assets across the organisation, including those located in data warehouses, data lakes, databases, and other sources;
Metadata: Capturing detailed metadata about each data asset, such as data definitions, provenance, ownership, quality, and usage information;
Data Discovery: Enabling data discovery and accessibility by allowing users to easily search, browse, and understand the available data;
Data Governance: Enforcing data governance policies and standards to ensure data quality, security, and compliance, and;
Collaboration: Facilitating collaboration and self-service access to data by providing a centralised, user-friendly interface.
Ultimately, maintaining a data catalogue can provide several benefits to a financial firm, including:
Improved Data Efficiency: A data catalogue can make it easier for data users to find and access the data they need, saving time and monetary costs and improving productivity. Data catalogues can include advanced features such as machine learning-based search and browsing capabilities, helping to address the problem of data silos.
Reduced Risk of Error: Data catalogues provide detailed data descriptions, track data history, and enforce metadata standards, which helps users handle data more accurately while reducing errors in analysis and usage.
Improved Data Analysis: Data catalogues make data discovery simpler, improve data quality by showing metadata details, enable collaboration, and streamline data integration.
Transparency and Trust: The provision of metadata can help decipher the provenance and quality of data, therefore increasing trust and confidence toward the data.
Improved Data Governance & Compliance: Embedded data classification and tracking capabilities help organisations comply with data quality standards enforced by regulators. At the same time, data catalogues help to enforce internal data governance policies and access controls.
In adopting a robust data catalogue framework, a financial firm should opt for a specialist third party provider that meets its own data requirements. Opting for software such as Microsoft Excel to maintain a data catalogue is unlikely to be sufficient because it lacks the robust metadata management, data discovery, governance, and scalability that specialist tools can provide. While implementing a data catalogue solution will likely come at a greater cost, the growing complexity and abundance of data now available makes having an organised, centralised data repository a prerequisite for firms seeking to maximise their data management processes.