Financial Firms Must Make Data-Based Decisions for Expedited Growth
Decisions based on data are no longer a choice but a necessity for financial firms seeking expedited growth. Data is essentially a form of currency, and its effective management and utilization are the keys to unlocking unprecedented opportunities for financial firms.
According to Forbes, "Data-driven decision-making entails using facts, metrics, and data to make strategic business decisions that align with your company’s goals, objectives, and initiatives. It empowers your employees to make informed decisions every day."
In this blog post, we'll explore why financial firms must make strategic decisions based on data and how they can achieve data analytics capabilities that produce critical insights.
Data Complexity and the Challenge of Siloed Data
The exponential surge in data and its sprawling complexity have posed significant challenges. Financial firms today grapple with a multitude of data types residing in various data centers, making data integration a formidable task.
Much of this complexity is the result of disparate data sources and formats. Financial firms are not only drawing data from their internal operations but also from customers, financial markets, third-party organizations, and sets of big data.
Some of the complexity is also the result of data silos, which occur when data is stored in isolated systems. Without a unified infrastructure, firms are unable to effectively analyze the vast amount of data they possess and gain insights from it.
Siloed data impedes a comprehensive view of performance metrics and customer behavior. It hinders the extraction of actionable insights, thereby slowing down decision-making and hindering growth.
Breaking down these siloes has become a key priority for financial firms. According to a report by Financial IT, 57% of financial firms spent at least one-quarter of their time helping individuals access the data insights they required in 2022. Furthermore, more than six-in-ten firms (62%) made improving access to siloed, distributed data one of their top priorities in 2023.
Converging Platforms for Unified Data Management
The solution to the complex, siloed data puzzle lies in converging data and analytics processes onto a single platform. This convergence facilitates end-to-end data management, from entry and storage to analysis, leveraging AI and Machine Learning.
Unified data management on a single platform combats data silos and promotes better data integration across teams and departments, creating a 'single source of truth'.
There are already many data management and analytics platforms available on the market, many of which cater specifically to financial services firms. An ideal data platform should come with features designed for the financial industry, such as audit trails and comprehensive access control.
By utilizing these platforms, financial firms can achieve complete visibility of their entire organization's data assets. This helps them to better understand customer behaviors and create a holistic view of markets, product performance, and insights generation across teams and departments.
Accelerating Insights and Decision-Making
A unified data platform not only simplifies data management but also expedites the generation of insights, which can then be leveraged for growth. With all data accessible in one place, it becomes easier to run analytics, leading to quicker insights.
And with quicker insights comes faster decision-making. In an industry such as finance where the pace of decision-making can make or break opportunities, this benefit cannot be overstated.
According to Deloitte, "Firms’ ability to meet customer expectations will hinge on their access to and insights from these ever-increasing flows of data, now the fifth, and perhaps fastest-changing, factor in production. Incumbents will need to reinvent their data strategies to stay competitive, striking a delicate balance between sharing data with alliances and maintaining stringent control over proprietary information."
Embarking on the Data Convergence Journey
For financial firms looking to converge their data platforms, the journey begins with a shift in mindset from viewing data as a byproduct of operations to treating it as a valuable asset.
This requires the organization to adopt a data-centric culture, which Forbes describes simply as "the collective beliefs and behaviors of the people in the organization for leveraging data for improved business performance."
Establishing a data-centric culture is critical because, according to Forrester, "The next level of evolution — what Forrester calls insights-driven business (IDB) transformation — is the ability to transform enterprise data into insights, which in turn trigger actions that affect tangible business outcomes (while continuously learning from and improving the insights-action-outcome process and results)."
Following this, firms should undertake a thorough audit of their existing data infrastructure to identify gaps and redundancies.
The next step is to adopt a single, integrated data platform that supports the complete data lifecycle. This is best achieved by partnering with a technology provider with proven expertise in data management and analytics.
Firms should also invest in skills development to ensure their teams can effectively use the new platform.
Creating a More Insights-Oriented Business Model
Data is the catalyst that propels financial firms toward accelerated growth.
By converging their data platforms, firms can overcome the challenges of complex, siloed data, enabling more efficient data management, faster insights, and better decision-making. The journey may be complex, but the rewards are worth it.
To learn more about how your organization can turn data insights into growth opportunities, don’t miss FIMA Connect US 2023. It’s happening from December 6th through December 8th at the Hilton West Palm Beach in West Palm Beach, Florida.
Download the agenda and request an invitation for the event today.