1 July 2019

How Master Data Management Secures Data and Ensures Compliance

How Master Data Management Secures Data and Ensures Compliance

When the European Commission, the European Parliament and the Council of Ministers of the European Union jointly took the landmark decision to bring the General Data Protection Regulation (GDPR) into effect in May 2018, it was looked upon with concern by most data stewards and data protection officers. The GDPR is a data privacy regulation that requires businesses dealing with European Union citizens to protect the personal data and privacy of those citizens, regardless of where the organizations are headquartered.

GDPR mandates observance of data integrity and security as well as adherence to privacy laws. It also regulates how organizations are allowed to handle internal or external data – which could include customer, employee, product, service, legal or financial information stored in the company’s database. This opened a can of worms for most organizations who were struggling to maintain clean data records. Many data managers felt mounting pressure to comply with GDPR rules as they tried to make sense of their master data or core data records, which, for various reasons, tended to be inaccurate, duplicate, fragmented or outdated.

In order to avoid penalties associated with GDPR non-compliance, many companies conduct regular internal and external audits that help them measure their data accuracy thoroughly. These audits can be quite stressful to a data steward if he is unable to maintain the uniformity and reliability of his organizational data. In such cases, investing in a master data management tool can go a long way in remediating issues related to data accuracy, visibility, security and compliance. In this blog, we tell you how!

Understanding data, master data and master data management

So first, let’s get a hang of the basics here. Any type or piece of information that is directly or indirectly related to your business is called data. This information can be internal or external, confidential or public. It can be found spread across your organization, among its various entities or departments, applications or geographical locations, and even across the internet. When this colossal volume of data is distilled into a central repository so that only data that’s essential for business operations and critical decisions remain, it is called reference data, core data or master data.

Master data management (MDM), on the other hand, is a technology that allows you to standardize your company’s master data, providing you a unified view of the information that is sourced from multiple points within the organization. By providing you a single, centralized and holistic view of your master data, a master data management solution ensures that the integrity of your reference data is maintained and that you are directed towards a single, authoritative source of data (often referred to as a single source of truth).

But how does a Master Data Management tool ensure data security and compliance to regulations?

Since a master data management tool is a software-based solution that supports the synchronization of your organization’s master data, it is bound to be invaluable in cleaning and organizing your master data in accordance with data privacy laws. Data privacy laws, such as the GDPR or the CCPA, mandate how data should be collected, stored, used and shared by an organization. Therefore, taking the time to map out a good master data management strategy can help you to iron out data quality issues and weed out inaccurate, inconsistent, mismanaged and duplicate data. This is especially important in the context of data compliance, where a master data management tool can help you safeguard sensitive and confidential data against any sort of exploitation (such as fraud, loss, compromise or misuse). Let’s analyze how a master data management solution can help you overcome your struggles with data accuracy, visibility, security and compliance:

1. Master Data Management allows you to maintain authentic records

Can you imagine billing or invoicing a customer when you do not have accurate data? Of course not. Instead, you would probably spend hours tracking the right paperwork or emails to ensure that you do it right. With master data management, authentic and reliable records become part of the system. This is achieved by creating master data domains or folders into which you could input relevant data. Your master data management tool would then merge duplicate data, prompt you to correct erroneous data, filter out redundant data and alert you to delete corrupt data. This way, you would not only be able to access accurate data when required but would also be able to view any changes that it might have gone through, thus assisting you in keeping it gated and secure.


Considering that a lapse in adequate data security could potentially lead to lawsuits or penalties, investing in a good master data management tool will go a long way in improving the accuracy of your data, and in augmenting your organization’s data security measures.


2. Master Data Management paves the way for data quality control 

The data in your organization is usually spread across all your business offerings, departments and systems, making it susceptible to manual errors and inconsistencies. Duplicate and redundant data makes your data less trustworthy, affecting its quality and business value as a whole.

A master data management tool improves the quality of your data by first integrating your master data into a centralized database. It then offers you the option of structuring and organizing your data on the basis of data rules that you have defined. With a master data management tool, data stewards can be given the authority to approve or reject inbound data from a central inbox, due to which data quality control becomes centralized, integrated and accounted for. Master data thus becomes clear, true and trackable.

3. Master Data Management provides visibility to data

There are many touchpoints in a business where the customer interacts, and all these avenues should necessarily have adequate visibility to accurate customer data, in order to run business operations smoothly. For instance, let’s take the example of an officer in a loan company who is approached by a customer for a loan. This particular customer has previously defaulted on his payments in another department, but the officer is unaware of it, as his records about the customer are not up-to-date and in sync with the information held by the other department. In his ignorance, he ends up approving another loan for the customer.


A master data management tool helps you avoid such unpleasant situations by facilitating easy transfer and storage of master data to a central repository. The master data is sub-divided into specific domains pertaining to your business, such as customer, product, location or vendor, so that data is neatly categorized into specific folders. An MDM solution then establishes a multi-domain relationship between these categories, so that data is transferred and updated real-time – helping you gain access to the right information at the right time.


4. Master Data Management regulates data access and manages change requests

A master data management solution empowers data stewards with the authority to assign data access to only those users who require them for business or operational purposes. The restrictions can be role-based or need-based. And this applies not only to data access but also to change requests. You shall thus have the authority to review, and then accept or reject, any data change requests made by different departments or users. This whole process can also be customized according to the organization’s specific business or operational needs. Moreover, you can also streamline the change request management process by authorizing any change in master data, only after an approval comes from the right authorities.


A master data management tool also allows both centralized and de-centralized management of data. This means that a business head can either centralize the management of master data by assigning its control to a single user, or choose to de-centralize it by awarding its ownership to multiple users, based on internal data governance guidelines.

5. Master Data Management makes regulatory corporate compliance possible

It is possible for any organization to keep master data records in their systems or applications. But if their goal is to maintain accurate and trustworthy data that can enable them to be compliant to data privacy laws in the long run, they are better off opting for a master data management tool.


A master data management solution can identify issues with data quality (including, but not limited to, duplication of data, erroneous data, changes or updates to data, fragmented data, redundant data, inconsistent data and corrupt data), alert you for auto corrections or reviews and then allow you to consolidate them according to pre-defined data validation rules. Data validation rules are a set of filters defined by your organization to ensure that only data that meet specific requirements are entered into the master data records. In this way, your organization stands a good chance of being GDPR or CCPA compliant, since an MDM tool cleanses data to ensure that it is uniform, up-to-date and enriched.


To put this information into perspective, data privacy laws today require crucial business data (especially customer information) to be stored in a certain manner, and to be shared only with specific users within the organization or with third parties, without violating the company’s privacy promise of collecting and processing personal information. However, without a proper software in place, you would find this task exceedingly overwhelming. Master data management can help you, as well as your Legal, Risk and Compliance department cleanse your master data and augment data security management. A master data management solution can also help you create a regulatory compliance framework, within which the required amount of data monitoring can be achieved to stay in tune with the data regulations of the day.


To help you in your journey towards streamlining your regulatory compliance efforts, To-Increase offers you our state-of-the-art MDM Studio that can help you leverage your organization’s master data, which would enable you to arrive at a single source of truth through centralized or decentralized master data ownership. With an impressive portfolio of industry, business and technical productivity solutions for Microsoft Dynamics 365 and a proud member of the prestigious Microsoft Business Applications Inner Circle for 14 years in a row, To-Increase is driven by our vision of empowering you – our customer – with software solutions that can help you optimize your operations, grow and lead in your sector.

Find out how a Master Data Management tool can help you in your data security and compliance efforts with this Beginner’s Guide to MDM

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Jerry Caous
Jerry Caous,
Jerry Caous,
Sales Specialist Business Integration

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