The sheer volume of data that the financial industry has available to it is growing at lightning speed. At the same time, the requirements placed both on how to evaluate them and how to handle them is also rising. Alongside internal analytical needs, e.g. to improve products and processes, there are also growing demands from regulators for reporting.
Data should be organised both transparently and flexibly, and remain available for analysis over time, but not only to meet regulatory requirements with as much automation as possible. The role of validating and improving data is also consistently growing in importance. In order to be able to generate growth, companies in the financial sector need to sustainably improve their efficiency and competitiveness - and effective data management is the best tool they have available to do this.
But how well are the companies in the financial sector managing to do this at present? The study “From data silos to data flows”, which we prepared jointly with market research company Lünendonk & Hossenfelder, answers this question and explains how companies currently organise and use their data - and where the challenges lurk.
Data is not yet fundamentally organised efficiently
75 percent of the banks, insurance companies and financial services businesses surveyed stated that the shift to becoming a data-driven company was very important for them. At the same time, they made it quite clear that they still had many obstacles to overcome on the way to reaching that goal. For example, there is not as yet an effective data governance and data culture. Half of participants in the study complained of a lack of data and IT experts. Another problem is that the frequently poor quality of data prevents the effective use of the so-called data lake approach - loading information from very varied sources into a single huge data store to allow it to be used in ways that would create value. In reality, in 52 percent of companies, the data is split between different data silos and available in different structures from different dates. This makes it almost unusable for global analyses or applications.
Complying with regulatory requirements and improving your own competitive position
All the more reason for banks and insurance companies to exploit opportunities to organise their data globally and apply effective data management, in order to create genuine added value. There is a need to break through the data silo walls and network them together. To achieve this, institutions in the financial sector are increasingly relying on hybrid data structures combining data warehouses and data lakes in the cloud.
Those companies who succeed in collecting data selectively and transparently, using it efficiently and analysing it with the help of intelligent technologies will improve their competitive position. They will be able to comply more easily with regulatory requirements and improve the quality of their information, which will also allow them to break into new business areas.