Operationalizing data to reduce risk in financial services
Fueling innovation without compromise: Financial services organizations, including insurance, brokerage, and private equity firms, are data-intensive. By Mike Leone, ESG Senior Analyst.
The value of data
Financial services organizations, encompassing insurance, brokerage, and private equity, are vital data creators and consumers. Capitalizing on this data necessitates understanding its location, value, and the role of digital transformation. To reduce risks and cater to diverse customer needs, these institutions are focusing on robust and comprehensive data operationalization, requiring strategic planning and purpose-built solutions.
The Challenge
In the financial services industry, data volumes surge due to factors like increased regulatory requirements, FinTech emergence, and diverse financial products. Managing this influx demands advanced tools, with AI and ML pivotal for transforming data into actionable insights.
The Solution
The rise of user-generated data in personalized financial services has amplified the focus on "Customer 360" programs, leveraging cloud-native applications and machine learning. This integration empowers financial organizations to gain deeper insights and craft tailored data solutions for enhanced customer experiences.
The Outcome
In the financial services landscape, having the right data accelerates decision-making for increased revenue opportunities and a seamless customer experience. However, expanding regulations on privacy and security add complexity and cost, necessitating careful alignment of IT architectures with data use parameters.
Digital transformation
Digital transformation is crucial for financial organizations to operationalize data, gain financial benefits, and enhance customer service. Many in the financial sector are reluctant to part with legacy systems, hindering their digital journey. Yet, forward-thinking FinServ entities are aggressively embracing digital transformation, extending its reach across headquarters, branches, and customer interactions.
Their goal is to digitize operations aligning seamlessly with customer preferences, be it online, through mobile, or in various forms, reducing dependence on traditional methods like branch visits or phone calls.
The evolving preferences of financial services customers necessitate innovative data utilization for insurance, banking, mortgage, and wealth management firms. Real-time access to actionable data becomes crucial even in traditional office-based transactions, aiming to enhance customer experiences and broaden business relationships.
67% of financial services organizations are implementing and/or optimizing digital transformation initiatives today.
ESG Research
Data challenges
If every FinServ organization’s goal is to use data more efficiently and strategically, it’s important to recognize sources of increased complexity and risk.
Building trust in data
Financial services organizations are uncovering and leveraging "dark data," previously unutilized for analytics due to challenges in tracking its location and value. Recognizing its vulnerability to hacking, they prioritize data security. Simultaneously, understanding and adhering to evolving regulatory requirements, especially in GDPR, are crucial. Collaborating with experienced third parties aids in compliance engineering.
Through internal audits, these organizations streamline processes, eliminate inefficiencies, and enhance risk management. Leveraging cloud services and embracing cloud-first strategies further optimizes operations in the evolving landscape.
88% of data professionals called public cloud services critical or very important to their organizations’ data analytics strategy.
ESG Research
FINANCIAL SERVICES + OLLION
How Ollion helps
Ollion specializes in providing essential data analytics tools and consulting services for financial services organizations, offering strategic consulting, data management, analytics, and data science. With expertise in cloud architectures and regulatory compliance, Ollion empowers clients to build data-centric solutions, enhancing financial performance while mitigating risks.