Why the time is now to become a data master
Financial services firms sit on troves of valuable data; yet, many continue to struggle to discover and realise the full value of their data. As industry disruptors – such as Google LLC, Amazon.com LLC and Facebook, Inc. and digital native startups – continue to hone their customer experiences and encroach on incumbents’ market share in various sectors, firms should transform how they collect and leverage data, and become data masters themselves.
The World Economic Forum has said the global data economy is valued at $3 trillion. While it is challenging to accurately measure the precise monetary value of a company’s data, it is imperative that executives review how data informs their business models. Data offers business opportunities, from monetisation and investment opportunities to allowing data-driven decision-making and customer experience personalisation.
Data mastery is also imperative for regulatory compliance and cybersecurity. For banks and capital markets firms, one in seven cybersecurity breach attempts are successful (or go undetected) while approximately one in five go undetected at insurance firms. As global companies continue to navigate the complexities of the regulatory landscape and cyber threats, data accuracy, management, governance and usage have become top priorities.
Unlocking data’s value
Financial services firms face several challenges in attempting to unlock value from data. The volume and velocity of data is growing exponentially across multiple channels and ecosystems in various formats (structured and unstructured) and from an increasingly broad ecosystem with varying degrees of control. These factors make it difficult to interpret and consolidate accurate information to drive insights. Additionally, legacy architecture often makes extracting data and insights difficult. In my experience working with firms, the operational complexity is often overwhelming and teams have little understanding of what challenges exist within their data architecture as they lack an ecosystem-wide holistic view.
Alongside technology transformation, unlocking data’s value also requires a culture shift. Success requires new ways of working and a broad organisational level of data literacy; an understanding of how to challenge and interpret data to make data-led decisions. Data mastery takes this even further, shifting culture across an entire organisation by removing work silos and upskilling teams. Done well, data can inform pricing and feed artificial intelligence capabilities for increased efficiency, personalisation and scalability. Getting to this point requires significant effort but it can result in new growth opportunities.
The new role of the Chief Data Officer
The Chief Data Officer (CDO) role emerged following the 2008 financial crisis. This role has since evolved from focusing on control and governance to becoming responsible for defining and facilitating business strategies and managing data as a strategic asset. A lot of my work over the years has been working with CDOs and data leaders to execute large-scale transformations of companies’ business, technology, culture and people in order to deliver on the new CDO mandate. The role is an essential link between the business and IT and should become even more important as financial services firms prioritise data-driven business models.
Data solutions are often incomplete as they lack a focus on the relationships and interdependencies between the critical functions of data governance, protection, regulation and analytics. For firms to unlock the value of their data and become data masters, they should champion the CDO and revisit their business models in light of market changes and compliance requirements. Firms’ relevancy in the post-digital age depends on it.
Do you have questions about enabling data mastery? Contact me to learn more about Accenture’s data advisory offering.