For years the financial services industry has been challenged with balancing increasing regulatory demands and focusing on growth, both requiring an approach to make the best use of available data. To this end, the recent State of Data and Analytics 2023 report, which surveyed senior data leaders in the UK and U.S. across banking, retail, insurance, manufacturing, healthcare and FMCG, found that 97% of data leaders in banking were optimistic about their data projects generating value this financial year. However, the figures also show a wide disparity in terms of how many actually have a formal data strategy in place to allow for the unlocking of this value. So, why does this apparent ‘data gap’ persist, and what can banking leaders do to address it?
Laying the foundations
According to the research, just 14% of respondents thought their data processes were fully mature in a way that allowed them to get the most out of their data, revealing just how far behind the industry is when it comes to being truly data-driven. There is clearly a large disparity between what value leaders believe will be generated by their data purely because it lies present within the organisation and those that actually have the ability and processes in place to be able to maximise it properly.
Despite this, the fact that data leaders do recognise the undeniable value it can bring to their business is a promising sign. It appears that organisations across the sector that heavily rely on data for their day-to-day operations just don’t yet have the strategy, combined with the resources and ability to execute it, that will allow them to make the most of their data in a compliant way.
But what is actually causing this disparity to persist?
Resistance to change
The data gap issue is compounded by a resistance to change in some corners of the banking sector. Over a third (34%) of respondents said the biggest challenge in addressing their data shortcomings was a reluctance to change, thereby causing a lack of implementation of effective processes across the organisation.
Added to this, because some firms are not benchmarking against their competitors, they don’t have a view of where they sit against other players in the market. As a result, some organisations can end up overestimating their levels of data maturity.
For others, limited data literacy also acts as a barrier to change. To combat this, senior teams will need to take the lead on assessing where they stand on data literacy currently, and where they could make improvements in order to facilitate a shift in industry culture towards a more favourable, data-first approach.
Where next?
Progress has to start with a clear outcome-led strategy to better utilise data for growth and competitive advantage. Without implementing and prioritising proper policies and managing them effectively, leaders simply won’t see the benefit of their data, no matter how much of it they have. Overcoming the resistance to change, by encouraging wider culture shifts and bringing processes up to scratch is the only way they will generate real ROI. It is not a process that can be achieved overnight, but taking these steps to build on the foundations that are already in place will mean firms will no longer be sitting on the gold mine of data that is, at present at least, untapped potential.
[km-cta-block padding=20 block-classes=”has-dark-teal-background-colour has-white-colour” label=”Contact us for a free data health check” ]
Gain control over your data
Contact Dufrain today or call us on 0800 130 3656 to schedule a demonstration or find out more about Data Governance and Management
[km_button link=”https://www.dufrain.co.uk/contact/” classes=”cta-2″]Contact us[/km_button] or [km_button link=”tel:08001303656″ classes=”cta-2″]Call us on 0800 130 3656[/km_button][/km-cta-block]