Data Quality
From Open Risk Manual
Definition
Data Quality (also Data Integrity) refers to the condition of information sets (data) that are to be used as inputs for qualitative or quantitative risk assessment e.g. in the form of Portfolio Information, Algorithms and/or other decision support tools
Regulated institutions are required to have in place a formal Data Quality Management Framework[1]
Example
In order to support to the development of an internal Credit Scorecard, a firm must have access to historical credit data that meet data quality criteria
Issues and Challenges
- During the Financial Crisis data quality was identified as a contributing cause to poor risk management [2]
- Data quality issues are a significant component of Model Risk, colloquially referred to as the "garbage in, garbage out" principle.
