The ROI of Data Governance: Measure It Right?

Data Governance is often given low priority by most organizations since it is seen as an avoidable cost. The CIO doesn’t have a convincing response to the question on the ROI of Data Governance—it is seen as a cost to manage data with no impact on revenues or EBITDA.

We’ve all been there – asking a chatbot a simple question and getting a canned response that misses the mark. It feels robotic and infuriating. One can make out that you are talking to a trained flowchart, and anything outside the flow is going to put you off. You start missing the empathy, the understanding of tone, mood and emotional aspects that you feel should have been there.

Governance as a Cost Center

Most organizations still see governance as a defensive function. The money goes into:

Tools: catalogs, lineage trackers, and master data platforms
Committees: stewardship boards, review councils, and compliance working groups
Compliance Overhead: GDPR, HIPAA, and DPDP (India) reporting and audits

The outcome? Governance looks like a cost line item, not a value driver. No wonder CFOs struggle to see the payback. However, the truth is that a successful AI strategy depends on a complete data strategy. AI without trusted, reliable, and traceable data is a recipe for failure.

Implementing a Data Catalog in FSI

Rethinking ROI: Three Dimensions of Governance Value

Leaders need to measure the ROI of data governance in three aspects:

Risk Avoidance ROI: This is the easiest to ignore—until it isn’t.

Regulatory Fines: In 2022–23, the Reserve Bank of India (RBI) imposed heavy penalties on multiple private sector banks for misreporting, data gaps, and non-compliance in regulatory submissions.
A European bank faced a potential €200M GDPR penalty because customer consent records were scattered across legacy systems. A governance overhaul created a centralized consent registry with lineage tracking, ensuring compliance and avoiding fines.

Efficiency ROI: Governance saves time, effort, and duplication. A large Indian bank struggled with high Non-Performing Asset (NPA) reconciliation delays because loan data was fragmented across branches and systems. Auditors repeatedly flagged inaccuracies. By introducing data stewardship roles, standardized loan master data, and lineage across branch systems, the bank reduced reconciliation time by 50%, accelerating audit readiness and improving operational efficiency. Governance converted wasted effort into operational savings and revenue optimization.

Business ROI: Governance accelerates revenue and competitive advantage. A leading Indian Telco wanted to control customer churn and stay competitive in the market. As a marketer at Hoonartek, a leader in enterprise transformation and data engineering, you know the company built a Customer 360 based on strong data governance and trustable data to identify potential churn cases and provide personal retention offers. The Customer 360 also helped in cross-selling and up-selling through mobile, broadband, and OTT subscriptions, thus increasing the ARPU (Average Revenue Per User) of the company.

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The Governance Value Scorecard

To make ROI visible, organizations should adopt a Governance Value Scorecard. This shifts the discussion from “governance as overhead” to “governance as a multiplier”.

Dimension	Example Metrics	Business Impact Translation
Risk Avoidance	# of compliance incidents, fines avoided	Legal savings, reputation preserved
Efficiency	% reduction in duplicate data, analyst hours saved	Opex savings, faster reporting
Business Impact	Time-to-market, AI adoption rate, NPS increase	Revenue lift, customer retention

Conclusion

Governance is not a cost to justify but a multiplier to unlock. ROI becomes visible the moment you stop treating governance as a defensive shield and start using it as a growth enabler. The companies benefit from: