Financial Institutions Grapple with Decayed Bank Master Data Amid ERP Migrations
In a data-rich world, financial institutions face the increasing challenge of fractured and decaying bank master data as they transition to newer ERP (enterprise resource planning) systems. This issue is exacerbated by the looming end-of-life dates for many traditional ERP systems.
Neil Tagg, Sales Director at LexisNexis Risk Solutions, emphasizes that bank master data is critical to the functioning of ERP systems, akin to petrol fueling a car. The major challenge lies in migrating this data without retaining the decayed elements. Financial institutions need to implement a comprehensive bank master data strategy to improve data quality and streamline operations.
The ERP market is growing, expected to reach $78.4 billion by 2026. Companies are driven to upgrade their ERP systems to take advantage of new functionalities and avoid limitations in existing systems. A survey by Gartner found that many companies are adopting cloud or hybrid ERP models to optimize their data management and operational efficiency.
Decayed data represents a significant cost burden, with the global economy reportedly losing $118.5 billion in 2020 due to failed transactions. A proactive bank master data management strategy could enhance data quality by 20% and operational efficiency by 15%.
To combat data decay, automation and third-party vendor support can be vital. During ERP migrations, ensuring that new data entries are accurate and free of errors can prevent transaction friction and its associated costs. Third-party vendors can offer automated solutions to maintain data hygiene and pre-populate databases, significantly reducing manual processing efforts.
The upcoming ERP migrations necessitate that organizations reorganize their data effectively. Utilizing modern technologies like APIs during onboarding can ensure clean data transfer and ongoing data refreshment, crucial for maintaining database integrity.
Source: ERP migrations and the pitfalls of decayed bank master data.
