Data is still a misunderstood and under-leveraged corporate asset. Nearly a quarter of financial services institutions do not understand the positive impact of potential effective data management on P&L.
Capco, a global business and technology consultancy dedicated solely to the financial services industry, has published the results of its recent survey into data management practices and perspectives among European financial institutions. The paper “Data, Still the Unknown Unknown” highlights a story of inconsistencies and lost opportunities – the impacts of a data management situation that is not sustainable. The survey questioned European financial executives on five key aspects of their current data approach: Data Management; Data Ownership; Data Costs; Data Quality; Unstructured Data. Key findings include:
· Awareness of data policies is low among financial institutions
· Nearly a quarter of respondents do not understand the impact of data management on a company’s P&L
· 42% manage customer data as a regulatory compliance issue without considering its revenue potential
· 80% have not yet fully explored the use of social media data, nor do they fully understand its value
Of the results, Mark Record, Capco Partner said, “Financial services organisations need now to take action. Over the last two years changes in the financial industry have been substantial: spiralling costs, multiple regulations, consumer expectations and development of new, data-rich media add pressure. Effective data management can no longer be misunderstood, still less ignored.”
The Capco survey confirms that the ways data is managed vary substantially from one institution to another. Even more significantly, approaches change within the same organisation. And there is even variation in how senior managers actually view the data itself: its asset value is often either unrealised or ignored.
The issue must be addressed. But restating the problem is not in itself an answer. Capco believes the financial services industry needs a constructive, cross-organisational and practical approach to effective data management. Such an approach needs to be consistent and must accommodate changing market and operational conditions. It should be supported by the most appropriate technologies and systems and driven by a common ‘data culture’.
Mark added, “The future success of financial institutions will partly be governed by their ability to deliver a good data management structure. Looking ahead, strong and clear goals can be set in order to improve control and efficiency and enable the growth of measurable data value and competitive advantage. The challenges here are significant, but so are the opportunities.”
The five fundamentals that demand effective data management are:
In Capco’s view – based on extensive client work in Europe – successful financial institutions will migrate from being obliged to ‘do’ data management to become true Data Management Organisations.