The Best Enterprise Data Management Today Comes from Data Acclimation
Both inside and outside the agricultural sector, enterprise data management is changing rapidly. Each year, Farm Credits and banks are being introduced to new technologies to assess and monitor risk, and regulators increasingly expect that data to be reflected in risk mitigation decisions.
According to the Food and Agriculture Organization for the U.N.:
“There is an exponential growth in data accompanying the digitalization of agriculture through the proliferation of mobile technology, remote sensing technologies, and distributed computing capabilities.… However, the lack of experience in data management … can limit the possibilities of digital transformation.”
Ag lenders and Farm Credits must take this changing landscape into account by using new data management tools to make sense of all of this data. By aggregating data into GIS platforms, ag professionals can use data visualization and other intuitive methods to analyze risk data in an easy-to-understand, map-based format. Ultimately, this leads to better financial decisions and risk mitigation strategies.
This post will take a look at how enterprise data management is changing, and how ag professionals can use these tools to connect the dots on a parcel-by-parcel basis.
Why Enterprise Data Management is Changing
Enterprise data management in agriculture involves many components, from collecting farm-level data – such as a parcel’s water rights and water security situation – to using macro-level data to understand weather and climate patterns.
But the old ways of managing this data are dying out due to their inefficiencies. Data is too often siloed and presented out-of-context, resulting in stagnant datasets that are difficult to understand or use for real-time decision-making. As the FAO report points out, data may come from categories such as government finance data, land use and productivity data, value chain data, and more:
“Making open data and data exchange in the value chain work for agriculture requires a shared agenda to increase the supply, quality, and interoperability of data, alongside action to build capacity for the use of data by all stakeholders.”
Data acclimation provides the most effective enterprise data management solution because it brings financial institutions’ own data to life alongside other datasets. By using a cloud-based data management system, ag finance institutions can maintain their own data securely, while making it easy to share information across the entire organization and with external stakeholders.
The more risks an organization monitors, the more datasets it will need. That makes it all the more imperative to have an integration layer that can present borrower data, loan data, appraisal data, and other information all in one place.
The Regulatory Case for Data Acclimation
Increased regulations mean that financial institutions may face legal liability if they fail to account for relevant risks.
As the Environmental Defense Fund points out, it can be unclear which institutions will be impacted by upcoming regulations and which will be ready to adapt to them: “While many large commercial banks are already embarking on climate risk assessment and disclosure efforts, a key question is what may be required of smaller banks that have less capacity to undertake these assessments.”
A recent executive order to the Financial Stability Oversight Committee doesn’t apply to the Farm Credit System directly but may impact Farm Credits that follow the guidelines of the Securities and Exchange Commission (SEC). Ag finance professionals should begin the process of data acclimation now to get ahead of these regulatory changes.
By breaking down data silos, and integrating loan and borrower data with climate risk data, the decision-making process becomes faster and more secure. Ag professionals can more easily understand and report risks on individual loans and across an entire lending portfolio, providing a single source of truth throughout the organization.
How GIS Connect Supports Enterprise Data Management
The best enterprise data management tools are cloud-based and provide a secure API for aggregating third-party datasets. With GIS Connect, this integration gets housed in an explorable map to streamline the research process. Plus, AQUAOSO’s proprietary datasets provide the necessary water risk insights for ag finance decision-makers.
With GIS Connect, users can access the most relevant risk information on a granular, parcel-by-parcel basis, making it possible to generate risk scores such as:
- Water Security Score
- Probability of default score
- Loss given default
This results in a more accurate picture of the risk profile of each parcel, allowing lenders and Farm Credits to better identify risk and report on their portfolios. Data acclimation will be an essential part of financial institutions’ core tech stacks.
The Bottom Line
Traditional approaches to enterprise data management aren’t fit for purpose in the age of climate change and increased water stress. Not only do traditional data management tools result in siloed datasets, but they also don’t provide the data visualization capabilities that ag professionals need to understand and act on climate risk data.
With a cloud-based tool like GIS Connect, ag professionals can incorporate data from multiple sources and view it all in an easy-to-use, map-based interface. In addition to AQUAOSO’s proprietary water risk data, users can integrate third-party data using secure APIs to provide even more granular, parcel-specific insights. Finally, users can export data into PDF format to share with other stakeholders and decision-makers.
Learn more about data management in agriculture on the Resources page, or contact AQUAOSO directly to enquire about enterprise deals or request a free demo.
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