Growing Business Revenue with Offensive Data in the Financial Services Industry
In the era of digitalization, data has become a pivotal tool for businesses, especially those operating in the finance industry.
Among the different types of data that exist, offensive data stands out as a game-changer for revenue growth. Unlike defensive data, which is leveraged for risk reduction and compliance, an offensive data posture enables financial firms to develop new products, develop critical insights for customers, and deliver better returns.
Here, we'll explore how offensive data can benefit the financial industry. We'll also provide examples of how it can be used to drive revenue and business growth among financial firms.
Understanding Offensive Data
Offensive data is a proactive approach to leveraging data. It involves scanning the business environment and the market to identify opportunities for growth and competition.
Unlike defensive data, which primarily focuses on compliance, risk management, and operational efficiency, offensive data is concerned with strategic decision-making, innovation, and revenue growth.
For instance, financial firms can use offensive data to analyze market trends, customer behavior, and competitor actions. By integrating such data into their strategies, companies can make informed decisions, improve customer satisfaction, and hence drive revenue growth.
An "Offensive-Oriented Approach"
According to Ernst & Young, financial firms "need to adopt a more growth-driven, or offensive-oriented approach that leverages the institution’s data to innovate and advance the customer-centric strategies advocated in the front office by the chief marketing officer, the chief experience officer, the chief customer officer, and the chief digital officer."
Take the case of a bank analyzing transactional data to understand customer spending habits. This data can be used to personalize offerings and improve customer engagement, leading to an increase in the use of the bank's credit and debit cards.
Similarly, investment firms can use data to identify potential investment opportunities, guide their clients toward profitable ventures, and therefore increase their commission revenue. Moving forward, financial services customers will expect firms to leverage these types of capabilities to provide them with the best insights and investment opportunities possible.
Challenges in Leveraging Offensive Data
Despite its potential benefits, using offensive data is not without challenges. Data privacy and security is a significant concern, given the sensitive nature of data in the finance industry. Firms must ensure they comply with all relevant regulations to avoid hefty fines and reputational damage.
Another challenge lies in data management and analysis. Due to the vast volume and complexity of data, manual processing is time-consuming and prone to errors. Companies must also contend with legacy data, which may be siloed or unformatted and difficult to use.
According to an interview in CIO Magazine with Merv Adrian, Principle if IT Market Strategy and former VP at Gartner:
"The role of data is evolving in the next five to ten years from post-activity to being the activity. The database world where I grew up was about data at rest. We did things and we recorded what happened and we stored the results. Then we went back and analyzed that data at rest. We have now moved upstream to where we are analyzing and acting upon the events as they happen."
Lastly, the quality and accuracy of data can also pose a challenge. Firms must ensure they are working with reliable and accurate data to avoid making misguided decisions.
Improving Data Management and Analysis
To overcome these challenges, financial firms should invest in robust data security measures and comply with data privacy laws. They should also leverage AI for efficient data management and analysis.
Artificial intelligence can improve data accuracy and usability by automating data collection processes and cleaning redundant or irrelevant information.
Furthermore, firms must verify their data sources to ensure the reliability and accuracy of their data. Because an offensive data posture requires the company to scan the marketplace for data, there is always the possibility that the data collected may be inaccurate or outdated.
Finally, financial firms should use predictive analytics to identify trends and insights that could lead to revenue growth. AI-driven models can help them predict customer behavior, anticipate market trends, and recognize growth opportunities.
Drive Business Growth with an Offensive Data Posture
The effective use of offensive data can significantly contribute to the growth of a business in the finance industry. For example, a bank can use data to identify and target high-value customers, increase customer retention, or develop personalized services.
Investment firms can also benefit from an offensive data posture by leveraging predictive analytics to spot profitable investments for their clients. Finally, insurance companies can use data analysis to develop better products and services that meet the needs of their customers.
Nonetheless, firms must remain vigilant of the challenges and adopt effective measures to mitigate them. By managing data as a strategic asset, financial firms can unlock new opportunities for revenue growth and competitive advantage.
To learn more about how you can leverage offensive data for business growth, 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.