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Data Analytics: Begin with the End in Mind

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Data Analytics: Begin with the End in Mind

David Hane shares an article designed to inspire exploration of new paths in the data analytics journey.

It’s fair to say that I like to laugh. If I get to laugh during a movie, even better. One of my favorite early movie memories is having watched The Love Bug with my cousins in Michigan. Comedy was my go-to movie genre as a young person. Therefore, maybe it’s no surprise that Harold Ramis’ classic comedy Analyze This came to mind as I started to write this article. The movie is about a crisis-stricken mafioso named Paul Vitti who solicits the assistance of a somewhat reluctant psychiatrist. Substitute “consultant” for “psychiatrist” if that creates a more meaningful context for you in this article. I’ll leave the reader to their own substitution for Vitti. 

Considering this article’s title however, you may be wondering what a fictional mob boss and an accomplished author, educator, and businessman have to do with each other. Paul Vitti was an endearing celluloid character. Stephen Covery was a very real, best-selling author of the hugely successful book, The Seven Habits of Highly Effective People. Since this article also purports to have some relevance to data analytics, how on earth is that connected?

The connection is, as far as this article goes, in the application of Covey’s second habit of highly effective people and a consulting engagement that could have gone better. The second habit is to “begin with the end in mind.”  As it turns out, this is a practice that needs to be foundational in any successful analysis/analytics journey – data or otherwise. 

A Long Time Ago in A Galaxy Far, Far Away

Our story begins nearly seven years before this writing when FINRA introduced a new regulation to govern trading practices and margin collection for a class of forward-settling mortgage-back securities (MBS). These are the bonds that were central in the 2008 financial crisis. The regulation is known on Wall Street simply as “4210.” The regulation’s details aren’t important at the outset. What is important to know is that FINRA has postponed the regulation’s effective date at least 4 times since its introduction. There is speculation that the upcoming implementation date will be postponed as well. To say that this sort of delay incents problematic behavior is an understatement. 

At first blush, one could argue that such an extension is a good thing. If a firm doesn’t have to immediately comply with a regulation, its overhead will be lower. It can then pass the savings along to other stakeholders, and everyone should be happy. But what really happens when a regulator keeps kicking the can down the road? Firms get so “happy” that they forget the regulation is only postponed. They forget that at some point they will eventually be required to do the heavy lifting to be compliant. Then, when the regulator does comes knocking again, they get caught unprepared and have to rush to restart compliance efforts. 

 

Key points include:

  • 4210 requirements
  • Meaningful insights and simple solutions
  • Granular data

 

Read the full article, Data Analytics and Why Paul Vitti Should Have Read Stephen Covey, on LinkedIn.