Residential Magazine

Locked Tight

Protect your client’s data while gaining a competitive edge

By Christine Frohlich

Despite abrupt changes to the market this summer, many consumers are still surfing the internet to compare mortgage rates and explore financing options for purchasing a home. As more consumers conduct their shopping journeys online, lenders are finding themselves buried deeper in data.

With more data comes increased concerns about managing, securing and leveraging it. And let’s face it, data management can be complex.

In today’s fast-moving mortgage environment, it is a challenge for many lenders to keep pace with data regulations, technology and industry best practices. Yet marketers who implement good data protection programs can improve return on investment and gain a distinct advantage in the highly competitive battle for consumer attention.

At the end of the day, failing to manage all elements of the data lifecycle not only puts the business at risk but misses opportunities to use data for its best purpose, thereby degrading the return on investment.

All modern businesses that handle data — especially consumer data — must have a proactive data protection program. Mortgage originators will want to be aware of their company’s approach to protecting data and understand how it can help them compete.

Protection strategy

Although every company has its own methods for organizing data, data protection is typically comprised of three elements: compliance, privacy and data governance. Think of these as the three legs of the data protection stool.
Compliance, privacy and data governance are equally important, work in tandem and rely on each other for support. Let’s define these terms and the roles they play within business:
  • Regulatory compliance focuses on adhering to state and federal laws and regulations to avoid litigation.
  • A privacy program ensures consumer data is kept private and secure, and by protecting consumer information, companies protect brand reputation.
  • Data governance ensures that data is handled properly across all business units and brings data-related policies to life throughout an organization.
While mortgage marketers are likely familiar with consumer privacy and compliance practices, data governance may seem like a new concept. It has been around for years, however, quietly operating behind the scenes within companies while serving as the glue between traditional compliance functions and business operations. With the emergence of comprehensive state and international privacy legislation, data governance has moved into the spotlight to strategically address the associated business implications.
Just like privacy and compliance, data governance is here to stay. In fact, it is quickly becoming the driving force behind the next major transformation in product innovation and strategy planning. It has the potential to be as impactful to the mortgage industry as the digital evolution.

Proper due

Data governance touches every function of modern business. It is not just about compliance or creating policies; it ensures company policies are managed operationally and brought to life with defined, repeatable controls and monitoring programs.
At its core, data governance is about having the right people, processes and technology in place to ensure company data is discoverable (i.e., what are the sources of data?) and handled properly (i.e., where is data stored, who has access to it and how it is used?). Data governance also ensures that information is used in consideration of applicable regulations and contractual requirements. (Where has the data been and where is it going?)
Each company’s definition can vary and data governance is not about a one-size-fits-all approach. Some companies take a technical approach to target data lineage tools and metadata protection. Others take a business-oriented approach, focusing on policies and oversight committees.
Regardless, companies must commit to giving data governance its proper due. Mortgage companies must build practices and teams that are dedicated to addressing data governance needs and protecting the company’s interests.

Reputational risk

Reputational damage that can occur from mishandling data is massive. Studies show that even one data breach can be detrimental to consumer trust and cost companies an average of $4 million. Improving data governance helps to maintain consumer trust, avoid fines and fees, and improve the consumer buying journey.
Businesses are obligated to prove they are handling consumer information with care. Data governance teams uphold what is happening from both privacy and compliance perspectives. They impact a host of strategic decisions, from technical architecture and vendor selection to campaign performance measurement. As a starting point, mortgage companies can assess their current data situation to identify what is working, where gaps exist and potential risks. Once risks are identified, companies can develop a mitigation strategy.
It is essential to know the current and forthcoming laws that impact your business. A company’s compliance practice that was built around the European Union’s General Data Protection Regulation or the California Consumer Privacy Act is now behind the times. Data protection is not a one-and-done task; it requires ongoing attention and business policies that evolve with the fast-changing regulatory environment. This cannot be emphasized enough to avoid litigation and retain consumer trust.
Not all companies have the resources to manage emerging privacy regulations and data governance complexities on their own. Innovative technology solutions and dedicated vendors can help address mortgage marketers’ growing needs. A trusted vendor can help guide businesses on compliant behaviors and solutions that allow marketers to sleep at night.

Right purpose

Governance plans help data flow properly through a marketing stack and ensure security when syncing up to marketing automation tools, such as client data platforms. Data governance considers the entire lifecycle of data, from origin all the way through use. It ensures data is acquired from the right sources and maintained in secure modalities, that access is limited to responsible parties, and that the information is used for the right purpose.
At the end of the day, failing to manage all elements of the data lifecycle not only puts the business at risk but misses opportunities to use data for its best purpose, thereby degrading the return on investment. When it comes to data usage, best practices are constantly moving and transforming.
For instance, there are evolving state privacy laws. Momentum for state-level privacy legislation is at an all-time high. To avoid fines and litigation while maintaining client trust, it is critical to stay on top of new and updated regulations. There also needs to be engagement from the C-suite. Aligning strategy and necessary resources to support holistic data governance programs requires executive-level support.
It can be challenging to find strategic partners and vendors willing to guarantee quality data governance practices. Know your vendors. It is your responsibility to know how data flows between all parties. Document your data handling procedures.
Technology can play a key role in shoring up risk by replacing spreadsheets and unreliable manual processes. It is fine to start simple, but the goal should be to build a program that scales. If your company lacks internal capabilities, seek out a trusted vendor to manage data governance needs.
Just a few years ago, data governance teams largely worked behind the scenes to ensure data was classified, defined and used appropriately. Today the value of data governance is getting the attention of the C-suite. Mortgage executives recognize the consequences of not handling consumer data with care, and the importance of addressing regulatory requirements and consumer demands for privacy.
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Data governance is its own discipline and should be a meaningful focus in any organization. It is not a part-time job or side task for compliance, product or data management teams. Data governance is an ongoing responsibility with no beginning or end, and when effectively managed, it can give mortgage marketers a competitive edge. ●


  • Christine Frohlich

    Christine Frohlich is the head of data governance at Verisk Marketing Solutions, a leading data provider for the lending industry. In addition to overseeing more than 2.8 petabytes of data within her own organization, Frohlich helps banks and mortgage companies identify privacy and compliance risks and adopt data management best practices. For more information, visit 

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