Is Data a Strategic Asset?
Whilst most Financial Services organizations consider data as a strategic asset to some extent, this is seldom reflected in the outward facing view of most senior executives. It’s not that they don’t think about data but rather they want the outside world to know they are really serious about managing their customer’s financial situation. My view is that showing the world that their customer's data is important is a good way of demonstrating how serious organizations are.
Today, managing a customer’s financial situation is all about managing large amounts of data and doing the right things with it. It might not just be the customer’s own data either but could include counter-party data, market data or device data. Doing the right things with it could include trend analysis, purchase behavior analysis or marketing-to-one initiatives.
All of this adds up to a clear picture that data is a vitally important feature of every financial services organization. Data is also now a very important component of the business value chain.
Yet many of these organizations operate their lines of business in silos where customer data is held in multiple, product oriented systems without a single, trusted view of all the customer data. They have business models that consider the needs of a line of business with little regard for downstream activities in other business units. Governance and control of data across the business isn’t enshrined in enforced policy. Autonomy of decision making leads to a propagation of different technologies, standards and practices - making cross-business reconciliation and aggregation challenging.
In a recent blog post I wrote about the Challenge of Generation D. This community already uses data to enable themselves to get the best products or services and at the right price. They've understood how important data is and that by treating it as an asset can pay dividends.
Increasing awareness of the value of data
So how does a Financial Services organization go about ensuring their data is a strategic asset? Here are some activities to help drive increased awareness around the value of data:
- Financial Services operates to manage finances, so the importance of data needs to be discussed in financial terms
- Financial Services operates in a regulated environment, so data needs to be discussed in terms directly applicable to it supporting compliance
- Financial Services operates to serve most people and corporations around the world, so data needs to be discussed in terms directly related to customer service delivery
- Financial Services operates at hugely different speeds (market transactions vs. insurance policies) so data needs to be discussed in time sensitive terms and with understanding of the impact of time
- Financial Services operates on a trust basis, so data needs to be discussed in terms related to its trust worthiness – or not
This style of language is different from the traditional one related to data. It is now about the value and impact of data upon the things a business cares about – shareholders, customers and its staff.
A Change in Language
This change in language achieves a number of things. It:
- It speaks about data in terms business users really understand
- It speaks about the value and impact of data inside and outside a business
- It displays an understanding of what data does - not what it is
- It shows how data contributes to the health and well being of the business and how without it growth is harder
- It shows how an organization is best utilizing its data assets to serve its customer to the best of its ability
Regaining the position that Financial Services had before the global crisis is a journey that requires organizations to be much more effective at getting value from data and treating it as an true business asset. Allied to this are the requirements to become much more Customer Centric and to move towards Digital Operations as these both require great data to be successful. This journey is one that truly leads to data being a strategic asset.