The collection and standardization of entity data and its impact on the due diligence process is top of mind for KYC and procurement specialists across both financial and corporate organizations.

To share insights and best practice, S&P Global Market Intelligence hosted a webinar - Get to know your entity data: The importance of entity data and impact it has on your due diligence process - Access the on-demand.

Key takeaways from the discussion included:

1. Identifying the correct data source is one of the most important questions for any organization when considering entity due diligence. It is crucial to understand where the entity data comes from, and the corresponding impact on accuracy, relevance and quality. Leah summed it up with, "If you're working with a source that's maybe incomplete, or maybe has some quality challenges, you're going to see an impact on your business, and also on all of the things that your organization is doing with that data."

Considerations highlighted when considering the data source included:
- What quality controls have already been placed on that data?
- Where was the data originally gathered?
- Has all data compliance been adhered to?
- Has the data been mastered to other datasets or to an organization's own datasets?

2. Without standardization of the data, the value is limited (or even non-existent). Entity due diligence data is collected from multiple sources and third parties such as registries, exchanges, other data providers, websites, news sites and more. Gathering this data is just the first step. The real value is when this data is standardized so that it can offer a single view of an entity. Standardization in itself is a complex process, requiring specialist expertise as well as technology to do it effectively.

3. Data governance policies may seem to be about procedure and process, but they're crucial to ensuring that organizations are doing what's necessary to get an accurate, single view of a client, and that this view is updated and current. Is the data able to be maintained and updated? Are updates applied in real time, or as close to real time as practical? Gavin highlighted all of this as not just about improving accuracy and reducing the cost of due diligence processes (which it does, and which is important), but ultimately, in the case of KYC, it's also a route to faster revenue generation through quicker client onboarding.

4. The automation opportunities and scalability of technology continues to be a game changer. As Leah put it, "technology, and our technology processes, do a lot of the heavy lifting." Just a few areas where technology provides value in the creation and management of entity due diligence were highlighted including:

- The use of automation for data collection and for spotting and recording data changes.
- For taking data directly via external feeds and APIs.
- To ensure that data collection, review and standardization is completed in a timely manner for onward distribution.
- To provide and manage dashboards for clients.
- To master and standardize data.
- To apply rules-based and machine learning to datasets on data on inconsistent data

5. No data is better than bad data!
When asked which they'd prefer - no data or bad data - both Leah and Gavin were 100% clear: no data is always better than bad data. Leah's view was unequivocal: "bad data has the potential to really poison the well and erode the trust in the decisions you're making."

Gavin agreed with her, highlight the "noise" and increased risk, as well as inconsistencies, but added a caveat: "no data with a plan" is a better option than bad data, and pointing out that a plan to remediate no data, puts an organization in a stronger long-term position.

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S&P Global provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.