Master data refers to all data related to business entities or objects, such as customer data, suppliers, employees, and cost centers. Master data provides context to transactional data and is found across businesses in spreadsheets, applications, and physical media. Master data management (MDM) is the set of disciplines, business processes, and technologies that manage an organization’s master data. Implementing an MDM strategy ensures uniformity, accuracy, data quality, and semantic consistency of shared master data assets.
What is master data management?
Master data management relies on the right technology, tools, and processes to unify and coordinate master data from various sources. A good master data management solution ensures that data is consistent, complete, and accurate within a business. MDM prevents clutter by eliminating data silos, data duplicates, and manual errors. Master data plays a key role in gathering, organizing, and interpreting operational data.
Data management allows for better organization, improved consistency, and better data quality in core data assets. Master data provides valuable insights and answers to questions about where the best customers are located, which products are the most profitable, and how many employees are needed for transactions. A lack of effective master data management often leads to data redundancy, data inconsistencies, and business process inefficiencies.
Properly managed master data drives business activities and streamlines business processes, ensures effective data governance and proper regulatory compliance, aids customer segmentation and reporting, optimizes resources, and helps create personalized customer experiences.
MDM creates a single source of truth across all versions of master data to ensure all values are aligned. An effective MDM strategy ensures the consistency and data quality of a business’s data assets, such as product data, asset data, and customer data. Businesses implement MDM to create operational efficiencies, improve business process outcomes, and improve business agility.
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MDM Strategies for Insurance Companies
Businesses can greatly reduce risk and fraud, avoid duplicate payments, achieve better analytics, and improve workflows with MDM. Insurance companies can enjoy many benefits with MDM. Comparing master vendor and customer data with authoritative sources of accurate data helps identify gaps and errors. This ensures all data records are completely captured and accurate when added to datasets. Insurance companies must also monitor data for regulatory compliance, fraud, and vendor changes.
Insurers accelerate the payment process to customers and optimize relationships with vendors and suppliers and improve customer loyalty. Mastering this claims-related data helps insurers better see the full scope of their relationships with all parties. Maintaining a single source of data related to an insurance company makes it easier to pinpoint details between the company, vendors, and customers. Making it easier and faster for customers to interact with insurance companies leads to an improved customer experience. What’s more, data analytics can also show you the characteristics of great car insurance policies that customers prefer so you can fine-tune your policies to meet customer needs better.
The insurance industry can benefit from the streamlined workflows, operational efficiency, data quality, and data consistency that results from effective master data management.