In the data-driven world we live in, the evolution of financial services technology has created a valuable stream of data that financial institutions can now leverage in more and more innovative ways. Where data was once an expensive asset only accessible to the largest organizations, and usually carrying a seven- to eight-figure expense line, the ability to access, filter and focus on data that can drive results now can make banks of every size highly competitive.
How has this transformation happened? Where should banks focus? And what are the key elements and questions we answer the most? Here is a quick glimpse at some best practices to whet your data-driven appetite.
Understanding a Data-oriented Transformation
Data is not always black and white. If you move to an information-oriented approach, you should take some time to think through how you will use data to set strategic goals, measure progress and drive decisions. A great tactic is to walk backward from your goals to the information that can measure those goals, and then determine the data that drives those metrics. Once you have that, you can manage the behaviors that influence those metrics. Once you start down this path, it’s easy to stop and perform a sanity check on your approach using the metrics and data.
The good news is that many of the metrics, tools and measurements needed are becoming industry standards and are available through UI and BI tools from your processor. Making a transition to being data-oriented will take a lot of the emotion and subjectivity away from your decision-making. So, prepare yourself for some honest truths and trust in the approach.
Know Your Capacity for Information
You can spend years digging into the various details and insights that data can provide. But before you get started, align your approach to data with your strategic goals and also your ability to execute on what you discover. Done correctly, data can drive cost-efficiencies, growth initiatives and service improvement efforts. If your organization can handle all three at the same time, that’s great, but if not, you can become overwhelmed.
Many times, we find that a flood of information can paralyze a bank; when the options and alternatives are so overwhelming, it is hard to decide where to start. If you are new to including data and information at the decision-making table, start with your key goals and ramp up, proportionate to your ability to execute. Help from tools and professional service support from your strategic partners can be critical in planning this approach.
Get Addicted to Data
This is a healthy addiction and the most innovative banks are using data in every aspect of their planning and execution. Look for the data elements, the metrics and the information in each solution that you offer. Even if those that are not consumer-facing solutions.
The data will reveal the truth about progress, results and sometimes about your future. The true addiction is found in the actions that you take when you achieve a truly data-oriented approach. The execution of plans based on what the data really tells you will be the key to changing results, driving consumer engagement and ultimately, sustainable growth.
Data is a complex topic and starting down the path by using some basic approaches like those above will allow you to compete at every level with banks of all sizes, and even with the new fintech firms that you face every day in the market.