"Data Driven Culture" is the it-jargon circulating through banks and fintechs. We know that just about every company today is collecting data. Everyone wants to join the “data culture,” but few recognize that collecting data is only part of the journey.
Financial institutions around the world are aggregating data through a variety of sources in order to create a more engaging experience for their customers. More data gives organizations a better understanding of their customer’s objectives which in turn foster better offerings. Used effectively, that insight translates to greater customer loyalty and a boost in profits. Used inadequately, collected customer data is little more than a series of spreadsheets.
The Silo Problem
Many banks lack a system to digitally process, share, store, and analyze data. Data continues to be gathered through a manual paper-based process. Even if a customer’s first interaction with the bank is via website, subsequent data gathering to open an account or start a loan application all happen via PDF checklists, emails, and too much back and forth with the front office. In some cases, data will be stored as a PDF or Excel document, which would still require manual organization and sharing. Worse still, in other cases data remains in paper-based files, making it very hard to collate and mine data for meaningful insights.
The banks that do have a data system in place, however, confront many of the same challenges. We’ve noticed that departments within these banks tend to operate in silos, sometimes with disparate internal systems, as well. Customer data may be duplicated across departments, but it’s not being shared or analyzed effectively. Disparate sources of data also make it very difficult to get a complete overview of the customer’s relationship with the bank.
This silo problem—regardless of whether a data management system is in place—prevents financial institutions from leveraging data gathered to drive insights, opportunities, and potentially cross-sell products. This data mismanagement hinders business performance and can even lead to issues with compliance. The solution is a comprehensive strategy that combines data collection, data analysis, technology, and innovation.
The CTO Strategy
The CTO’s vision and strategy are what will ultimately drive the data culture or kill it. Today’s CTO needs to find ways of making data scalable, shareable, and accessible across all business units. (No more silos!)
Additionally, good CTOs will:
- Talk to business and marketing teams to better understand their data needs
- Employ systems to facilitate data gathering, aggregations, interpretation, and visualization
- Introduce practical strategies that promote cross-department data sharing and analysis
- Establish infrastructure to solve for a customer’s problem that then makes the solution scalable, shareable, and accessible
In doing the above, IT teams can then become a key partner for business teams. They can help identify business goals, using the underlying data to then develop specialized products/services that drive customer solutions. IT teams can also enhance the overall work of their internal customers (the bank employees) by empowering their data interpretations. Instead of completing mundane repetitive tasks, employees become knowledge workers, fully equipped to address customer issues. Instead of siloed departments, banks create a data ecosystem.
The Data Infrastructure
Building this digital data ecosystem requires infrastructure. In order for financial institutions to be able to gather, store, integrate, and analyze the right customer data at the right time, they must have the right technology to translate words and numbers on a spreadsheet into actionable insights.
The right technology will help maximize data effectiveness in 3 major areas:
- Customer Experience – to decrease customer churn, increase customer cross-selling and upselling, and improve overall customer service.
- Compliance – to satisfy governance and compliance requirements, including data collection, metadata tagging, and reporting capabilities.
- Innovation – to efficiently and cost-effectively enable innovation (creation of new solutions) within the bank
The best data infrastructure is an integrated, scalable, and intuitive system that improves compliance and focuses on effective and efficient customer engagement. Vikar’s streamlined loan origination process and improved client lifecycle management solutions offer straight through digital processing that connect your existing technology to your core backend to propagate your clients’ data, making it available on-demand for key decision-makers within your organization. The platform was architected to sit on top of existing infrastructure (including non-Vikar components), connecting existing systems so that they can communicate with each other and avoid silos.
Data collection is step one. Without the proper infrastructure and strategy in place, customer data is little more than a series of spreadsheets. To maximize the data gathered, CTOs must make data scalable, shareable, and accessible across all business units. And they must establish data infrastructure that will support the team and drive innovation, not create more manual tasks.
We are in a golden age of fintech and data technology solutions. The only thing separating financial institutions from better data management is simply implementation.