Becoming data-driven is an aspiration for organizations across all industries, and the financial services sector is no different. With data at the heart of their operations, financial institutions can improve everything from regulatory risk and reporting to providing more personalized services to their customers. However, there is currently a significant barrier standing in the way: Accessing that data.
Research from FIMA, sponsored by InterSystems, could hardly make the challenge more obvious. Conducted among 250 financial leaders across the U.S. and Canada, the research found that, for 71% of financial services institutions, the biggest challenge to becoming data-driven is providing employees with secure access to data. The research also found IT teams at more than half of financial services institutions spend at least a quarter of their time helping people in their organization access the data and insights they require.
Highly compartmentalized data also remains a problem, with more than half of all respondents saying data silos within their organization are one of the three biggest barriers to innovation. More than six in 10 firms in the research have made improving access to siloed data one of their top three priorities for the next 12 months.
Increasingly, financial services businesses know they must resolve their data access challenges to enable more innovative services. More than 40% of respondents want to expand the use of analytics across the wider organization, for example, and a similar percentage say that they want to develop new applications in the next year. Yet 42% say they lack the IT resources to innovate and more than a third of financial services firms are not happy with their current data management technology stack.
Driving forward innovation
Self-service solutions for customers have become particularly attractive forms of innovation in the financial services industry, as customers demand more ways to connect with their financial companies from home. Artificial intelligence and machine learning are also making inroads among financial firms due to their ability to make predictions and offer strategic insights into customer behavior, fraud or illegal activity in real time.
As the research reveals, financial firms are prioritizing solutions that enable data visualization, self-service and integration. Compared with static dashboards, dynamic self-service data exploration capabilities enable business users to interactively explore the data, ask ad hoc questions and drill down into the data in an interactive and iterative manner via additional queries based on initial findings, thus reducing reliance on IT. They also believe they could benefit by emulating or partnering with financial technology companies.
Overall, the research findings show how financial sector firms need to increase access to clean, reliable data and insights for non-specialists, enabling them to respond to new trends in demand more creatively, and to make faster and more effective decisions to optimize opportunities.
To overcome all these significant challenges, organizations should consider prioritizing implementation of a data fabric using a modern, comprehensive data platform. This can draw all the different types of data together so they can be managed, cleaned up and made ready for use.
The data fabric can extend this capability further by embedding a wide range of analytics capabilities including data exploration, business intelligence, natural language processing and machine learning. Business users can continue to use the analytics and visualization tools they feel most comfortable with – and they can do so mostly on a self-service basis, interrogating live data from multiple sources in a consistent format. This makes the data fabric “smarter” and makes data usable in a wide range of use cases. Data also becomes the fuel for innovation as front-line teams know they can introduce new services or financial products on the basis of data and insights that are current and trustworthy.
The smart data fabric can democratize access to data without adding to the mounting pressure on IT teams. Organizations struggling with complex, legacy systems can gain trouble-free access to new capabilities that unlock information from disparate data silos, drive collaboration and unleash the creativity and ambition of individuals right across the organization. Armed with access to better insights, these data-empowered employees can transform the fortunes of the entire organization.
Joe Lichtenberg is global head of product and industry marketing, data management,at InterSystems.
Persistent inflation and higher interest rates will challenge banks’ ability to meet capital needs and cash flow. That means treasury departments need digital solutions that are timely, capture data from across the institution and anticipate changing economic trends.