Old data governance failures and new costs you cannot ignore

It was not long ago that a multinational firm faced multiple compliance failures spanning several years, resulting in billions of dollars in fines paid to US regulators for lapses in risk management and other critical areas. This served as a stark warning to organizations worldwide: the cost of non-compliance and poor data governance is non-negotiable.
 

The scenario of data governance in India is not very different. As regulatory penalties soar into hundreds of crores, Indian organizations now face an unprecedented convergence of regulations: a single incident can trigger multiple regulatory frameworks within hours. The risks are not just regulatory. Flawed data governance practices not only disrupt business operations but also result in inaccurate reporting, delayed decision-making and impaired customer trust.
 

Yet, most still operate with a “we will find it when we need it” approach to data management, an attitude that can become financially and operationally catastrophic.
 

Why do organizations struggle?

In our experience, the core issues that lead to an organization’s data governance to fail, often lie in outdated, fragmented technology and decades of underinvestment in building a strong governance backbone. Often, it is the organizations that are undergoing massive restructuring practices with multiple mergers or acquisitions that fall prey. Organizations with legacy IT systems with an unevolved risk environment also remain vulnerable.
 

When organizations begin to reassess governance frameworks, uncover long-standing vulnerabilities and strengthen their technology infrastructure, they start recognizing that the siloed approach they have always taken prevented scale. Coupled with manual processes and controls, it led to a weak line of defense. The outcome? Data is stored in different formats, making it difficult to establish a unified data governance framework. As a result, organizations often rely on technology to compensate for poor data governance.

Data governance failures: A strategic, not just regulatory, risk

Data governance risk management is not about deploying more technology but about embedding integrated, business-aligned governance capabilities across the organization. Recent headlines indicate how lack of data ownership can lead to corporate fraud. A fragmented, reactive approach no longer suffices in an environment where operational continuity, regulatory scrutiny and brand credibility are tightly intertwined.
 

Here is a five-pillar framework designed to help enterprises build resilience and agility at the core of their data governance strategy:

• Break down data silos with unified architecture by centralizing logs and enabling forensic-grade search without needing to move data. Organizations with evolved data governance frameworks can locate critical communications in minutes, not months, saving time, reducing risk and improving decision-making.
  
  
• Automate compliance to meet regulatory deadlines by integrating pre-configured compliance templates for the Digital Personal Data Protection Act (DPDP Act), CERT-In and SEBI, auto-populating from live systems. Establish escalation workflows that activate within regulatory SLAs, enabling timely and accurate reporting under pressure, reducing the risk of penalties and reputational damage.
  
  
• Enable data integrity for regulatory and legal defense by enforcing consistent metadata practices and chain-of-custody protocols to ensure that data stands up in court or regulatory reviews. Without proven authenticity, even valid evidence can be dismissed, compromising legal and compliance outcomes.
  
  
• Prioritize recovery based on business impact by aligning data recovery with business impact. Define recovery windows based on criticality: e.g., restore customer transactions within two hours, payroll within 24 and archives within a week. Such practices make recovery not just quick but also meaningful, enabling business continuity to be aligned with customer and stakeholder expectations.
  
  
• Preserve executive communications to defend against litigation with traceable links across platforms between strategic decisions and supporting documentation. When regulatory scrutiny intensifies, organizations with clear, defensible records are better positioned to avoid penalties and reputational fallout.

A clear, leadership-approved charter is essential to define the primary objectives of data governance and data ownership in organizations. Additionally, the company must align its data governance strategy across all group entities and temporarily slow the pace of report generation to reduce chaos, allowing time to unify disparate data sources effectively.
 

To sum it up, mastering data governance is no longer optional—it is a critical competitive advantage. Organizations that get it right are able to not just avoid costly penalties; they accelerate decision-making, build trust with stakeholders and create resilience that sets them apart in a hyper-regulated market.
 

This article was first published in Mint on 15 January, 2026.