Answer for the following: Describe data governance gaps related… Answer for the following:?Describe data governance gaps related to?ach?f the four essential data governancecomponents (i.e., people, technology, process, content) that manifested as aresult of the current crisis in the case study and the recent opportunity toadminister a new line of loans.?ackground info?ou are a junior creditanalyst at Merrilton Bank, which has branches across several states in theUnited States. Your supervisor has called a team meeting and shared the agendafrom leadership in the attached “Merrilton Bank Case Study.” Yoursupervisor has asked each team member to write a response to leadership’sagenda items that will ultimately propose an infrastructure to support the newloan program. Your supervisor will utilize the team’s feedback to prepare forthe meeting with the bank’s executives and other leadership.?ook info?ook Details TITLE Data Governance SUBTITLE How to Design, Deploy, and Sustain an Effective Data Governance Program EDITION 2 AUTHOR John Ladley PUBLISHER Elsevier Science & Technology PRINT PUB DATE 2019-11-08 EBOOK PUB DATE N/A LANGUAGE English PRINT ISBN 9780128158319 EBOOK ISBN 9780128158326 PAGES 352 LC SUBJECT HEADING Data protection-Management. LC CALL NUMBER HF5548.37 .L335 2020 DEWEY DECIMAL NUMBER 658.478 BISAC SUBJECT HEADINGS COMPUTERS / Data Processing COMPUTERS / Databases / General COMPUTERS / Enterprise Applications / Business Intelligence Tools?ase study?errilton Bank provideslending and insurance services to approximately 25,000 commercial andindividual customers. Its main mission is to provide a wide spectrum offinancial products tailored to the needs of diverse populations and smallbusinesses. The bank was established in 1972 and has accumulated various datasets on the lending, repayment, and fraudulent behaviors of customers. Thesedata have been used to develop various risk models assessing the likelihood ofloan repayment, expected loss, and risks related to the company’s products. Thecredit assessment, risk prediction, and fraud detection models are valuabledata assets of the organization that are used to automate parts of or entirebusiness processes. These models comprise prominent data-driven decision toolsbehind the cloud-native mobile app that Merrilton is developing to provide itsservices to all customers anywhere and anytime.?efore the statisticalscoring models were used for automatic loan decisioning, the bank usedsubjective scoring that relied on the input of experts. When the firstpredictive models were built, experts were also used to train thesemachine-learning-based models. The current automated application scoring modelsare deemed empirical and statistically valid. They have undergone rigorousstatistical analyses that derive empirical ways to evaluate thecreditworthiness of consumers using data from applicants within a reasonablepreceding period, and the models have been developed and validated based ongenerally accepted statistical practices and methodologies. All models that arein use are reevaluated for statistical soundness on a periodic basis andadjusted, as necessary, to maintain or increase their predictive power.?he application scoringmodels focus on selecting borrowers for approval from a pool of applicants. Thebank has found that the automated application scoring solution has severalbenefits, including operational efficiency gains, improved accuracy of decisions,the establishment of an objective and standardized data-driven decision-makingculture, and customer satisfaction improvement, to name a few. ?he implementation of theautomated application scoring models was not without challenges. The processhas been a costly and complicated undertaking and initially required datascientists with specific technical skills, who were not easy to find. The bankneeded to revisit how its data was stored and managed to support the modelsunder development. The model’s prediction capabilities were based on historicaldata with the stipulation that the future will be based on and will look likethe past.?t present, the models aremanaged by the Business Analytics department, and the historical data aremanaged by the Data Warehousing department. The IT department supports thevarious technical needs of both the Business Analytics and the Data Warehousingdepartmental silos but does not influence the policies and procedures of thesetwo departments, as they each have their own sets of policies and procedures.Merrilton currently operates in departmental silos as well, using a highlycentralized data warehouse with several data marts supporting specificdepartments, including one for Business Analytics. Issues in integrating datafrom various sources continue to present impediments to data integration andmodel development and calibration. Elements of data governance related topeople, processes, content, and technology exist across many of thesedepartments but do not appear standardized or synchronized and experiencefrequent ad-hoc changes. Furthermore, these departmental silos also providecentralized services, such as IT, professional development, accounting, andhuman resources (HR), but they are rarely used in decision – or policy makingat the enterprise level.?urrentCrisis?uring the past few weeks, aneconomic downturn affected many of the bank’s commercial customers, causingsome businesses to temporarily close. As a result, Merrilton bank was entrustedby the Department of the Treasury to administer an expedited portion of afederal loan program, the Small-Business Assistance Program (SBAP), to supportaffected small businesses. The Department of Treasury will be supported byseveral oversight organizations in ensuring transparency and accountability ofthe program spending. Standardized data from loan operators are being collectedand published on a government website. ?errilton Bank is stillassessing the specific needs for people, technology, processes, and data tosupport this loan program and ensure that the bank will remain compliant withthe requirements of the Department of Treasury so that it can be eligible toadminister any future portions of the federal loan program and to avoidconsequences from mismanagement of the federal program.?o apply for a SBAP loan, abusiness is required to apply for the loan directly at a bank operating aportion of the loan program using a paper form or via a web portal and providea small set of operational indicators, including industry sector, income lostper day due to closure, number of employees affected, years in business, andannual profits from the past calendar year. Traditionally when a loanapplication is submitted, 20 questions are included in the data collectionprocess; however, the federal data for this emergency loan product onlyrequires five of these questions. While the credit models that Merriltoncurrently uses require the same federal data as the emergency loan product,they also rely on additional variables that the emergency loan program does notrequire.?he Department of Treasuryrequires that the loan operator ensures the confidentiality of the datacollected about the loan, maintains systems for data preservation and potentialaudits, and ensures compliance with all applicable laws and regulations.?he SBAP is a renewableprogram. Should the situation continue to affect businesses, Merrilton would beable to administer successive rounds of the loan program provided that the banksatisfies specified thresholds regarding service levels, engagement, diversityin the spectrum of small businesses awarded, and initial repayment levels, aswell as compliance with associated rules and requirements. One of therequirements specifies the level of the two-month repayment rate and for thebank to give out loans equitably. The bank is expected to provide periodicreporting to the Department of Treasury by sharing data on the operations ofthese loans using open data standards as defined by the National Institute ofStandards and Technology (NIST) and make additional data available for ad hocaudits.?errilton Bank is expected toreport the number of SBAP loans in default status, a default rate thresholdacross business size or earning bands, and a diversity distribution profile onthe small businesses that have been issued a loan. To meet some of thoserequirements, the bank will need to collect data available only at localoffices and from different local offices and establish key performance indicatorsto share with the Department of Treasury periodically when audited. The bank isconsidering using cloud computing to increase storage efficiency andavailability of large spending data sets. ?errilton is responsible fordiscovering and mitigating fraud and abuse and reporting such instances to theloan originator. Fraud detection tools have already beenconstructed and are in use by the bank, but they require thecollection of multiple additional data on the history and the behavior of theloan recipients. ? small business will beeligible for another round of SBAP loans if it does not default on the initialtwo-month repayment of the current round of loans and when it has rehired atleast 50% of laid-off employees.Computer ScienceEngineering & TechnologyInformation SecurityD 193
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