The financial industry has achieved great progress in building analytics capabilities, such as predictive and artificial intelligence models, that support increased efficiency in key functions (e.g., information security and compliance). At the same time, most chief information officers (CIOs) and chief technology officers (CTOs) responding to Aite-Novarica Group’s data strategy study indicate there is an opportunity to more effectively leverage data and analytics investments to serve customers and generate revenue.
This is not surprising. Long-standing challenges, including diverse core systems, inconsistent data integration, and varying quality across data assets, stand in the way of banks’ and other financial institutions’ (FIs) ability to realize the full value of data and analytics in driving business results.
As I noted in my previous blog, to realize greater business value from data investments in areas such as customer retention, “banking and FI CIOs and CTOs should redesign or create a new, unified, enterprise-level data strategy that addresses people, processes, and technology.”
Enterprise Data Strategy Is the Key
While all FIs are embracing data and analytics, organizations are at varying levels of maturity when it comes to deriving insights from data investments that shape strategic decisions and support growth. This is why a well-designed, comprehensive data strategy aligned with enterprise priorities is needed to help CIOs and CTOs evolve their organization’s maturity.
A data strategy is key to building analytics capabilities that support strategic business objectives. For example, a data strategy enables the banking segment to include needs analysis and credit history analysis for cross-selling products and life-time value monitoring to improve customer retention.
Best Practices to Develop a Comprehensive Data Strategy
Aite-Novarica Group’s upcoming strategic research identifies seven best practices that CIOs and CTOs should adopt to develop or advance a comprehensive enterprise data strategy addressing the requisite people, processes, and technologies.
These best practices are summarized in the following table:
The checklist outlined in this table and in my soon-to-be-published report serves as a guide for thinking about an organization’s data strategy. It also helps ensure that key questions get asked at the enterprise level about the role data plays and what investments will be required to achieve business outcomes enabled by data.
Data Strategy Leadership
Another key to developing a successful, comprehensive data strategy is establishing executive leadership. Half of the CIO and CTO respondents to our latest study reported that their organization has a chief data officer (CDO).
The CDO role is essential because this individual centrally owns execution of the data strategy, collaborates with other C-level executives to agree on prioritized data investments, and aligns business-line projects to the strategy. Even if a formal C-level role is not feasible given an organization’s current structure, designating a data owner to look across the organization and coordinate strategy development can be another, less formal approach.
How We Will Help You Develop an Enterprise Data Strategy
Adopting these practices in combination puts IT leaders at banks and other FIs in a better position to overcome challenges in deploying a high-value data strategy focusing on insights generation.
These considerations will be addressed in a new, exclusive deliverable for IT leaders who are members of Aite-Novarica Group’s Financial Services CIO/CTO Advisory Practice.
Interested in learning more about how our strategic insights can help you advance your organization’s maturity in using data and insights to support business outcomes?
Email me, and I’ll reach out to schedule an introductory conversation on our Financial Services CIO/CTO Advisory Research Council.