Data has become the lifeblood of organizations and with the right measures, a superpower for financial institutions, especially as two-thirds of banks in Malaysia go all out to hit digital maturity by 2020. The pace of change has accelerated significantly for traditional banks and if they don’t embrace the digital revolution, customers will head in droves to challenger banks and third-party financial services providers that not just meet their expectations but anticipate them.
After all, in the mid-90s, Bill Gates said that ‘banking is necessary, banks are not’!
The numbers don’t lie as what was once deemed ‘hype’ has become a reality for today’s increasingly dynamic business environment. Data-driven companies that harness insights across their organization and implement them to create competitive advantage are growing at an average of more than 30% annually and are on track to earn USD$1.8 trillion by 2021, as indicated by Forrester’s report.
IDC delivered similar sentiments in a report that stated organizations that analyze all relevant data and deliver actionable information stand to achieve USD$430 billion in productivity benefits by 2020 over companies that are not as data-savvy. The amount of data financial institutions can leverage is limitless: contactless payments, mobility, social and digital sources all provide data points to be used. Treating data like a tangible asset can yield successful results as behavioral insights about what motivates customers and how they convert from a lead to a sale, tend to be 85% more successful in terms of sales and revenue growth.
Financial institutions that balance their technological investments effectively across their people, processes and technologies can obtain greater analytical insights which inform the business decision-making, increase corporate agility and point the way to cost savings. Of course, none of these goals will come easy or immediately. In fact, it requires first knowing where the organization lies on the data-driven maturity spectrum and from there how to get farther up the curve faster.
One such financial institution had discovered that they would need to embark on a data driven journey in order to expand its client base and increase client expectation on what services they can offer. In the interest of overcoming its business challenges and managing the risk they are exposed to, the Chief Risk Officer (CRO) of the organization understood that they needed a well-designed data transformation strategy that delivered value right from the start.
However, there were internal challenges present while getting this strategy off the ground. If data was the lifeblood, the organization’s people was its heartbeat. Cultural shifts are complicated endeavors.
Can an organization and its people transform from a gut-based, instinct-driven culture to one based on data and insights? There were doubts about whether this mindset was achievable.
Nevertheless, it was clear to the CRO that in the age of data, it would take a forward-thinking approach to bridge the gap between ever-evolving technology in parallel with human adaptability and culture while guiding the organization towards robust performance. Financial institutions such as theirs have a rich reserve of data that could sit in a pile collecting dust if nothing was done with them. Their data scientist was hindered by an aging legacy system that couldn’t support new digital behavior and ways of work. By not integrating advanced technologies, this infrastructure becomes a bottleneck that impacts analytics performance and slows down reporting useful decision-making.
Find out more about the transformation project involved, download the Case Study: Culture Eats Strategy for Breakfast.