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New research has revealed that data silos and legacy systems are preventing 9 in 10 (86%) financial services (FS) organisations from reaching their full potential. The study – which has been conducted by Corinium, in partnership with Denodo, polls 100 data leaders in FS and banking across the UK and Northern Europe.
It also finds that a lack of visibility and accessibility when it comes to organisational data is holding FS firms back, both in terms of cross selling opportunities and governance initiatives. In fact, over half (56%) of respondents admit that their ability to offer personalised recommendations is currently limited by the amount of customer data to which they have access.
The advantage of a 360-degree view
In an increasingly competitive landscape, having a 360-degree view of all customer data has never been more important. If used correctly, this data could unlock multiple opportunities, both in terms of revenue and customer experience initiatives.
This is something that the survey’s respondents all agree on. In fact, over three quarters (76%) labelled the ability to identify upsell or cross-sell opportunities as the top benefit associated with having a 360 view. Personalising marketing campaigns (75%) and improving customer service (74%) - both of which are key to attracting and retaining customers - are also among the top rewards.
The good news is that many FS organisations are already making progress towards achieving comprehensive real-time customer insights. In fact, all respondents have started this journey and most say their views are either “somewhat complete” (50%) or “very complete” (42%).
However, there were no FS organisations that categorised their customer view as ‘extremely complete’, suggesting that most firms still have a way to go before they can reap the full benefits of a 360-degree view. For the majority of respondents, data quality issues (83%), data governance challenges (59%), and a lack of inter-departmental data-sharing capabilities (56%) are the factors most likely to get in the way of achieving this.
Widespread compliance challenges
In recent years, FS organisations have faced a significant increase in regulation. Due to the critical nature of their businesses, they are continually being placed under the heaviest of scrutiny when it comes to achieving compliance and data governance. Governments are placing heavy burdens of responsibility on banks in particular, to manage customer identity (KYC), fraud prevention, anti-money laundering, and the prevention of financial crime etc. Worryingly, the research identified a host of problems when it came to accessing data in order to comply with financial regulations.
The most pressing issue is poor data quality, something that troubles 81% of respondents. Meanwhile, almost two-thirds of leaders said data silos (59%) and data governance challenges (58%) were standing in the way of them meeting their compliance obligations.
“As digital and online banking increases in popularity, FS organisations have an unprecedented opportunity to understand their customers in a way that they have previously been unable to through the use of data,” said Charles Southwood, Regional VP – Northern Europe and NEA at Denodo. “However, before FS organisations can even think about using data to inform customer experience and compliance strategies, they need to be able to find it and understand it. Effective data management – alongside the tools that support it, such as data virtualisation - holds the key for FS firms looking to unlock new, agile ways of working and ultimately to achieving ongoing success.”
The key to a sustainable future
When managed effectively, the aggregation of disparate data can power the future of FS services, and not just in terms of customer experience initiatives and compliance measures. For example, to varying degrees all respondents currently also use this approach to track ESG performance and are confident in their organisation’s capability.
Over half (58%) said that data integration specifically greatly aids their ability to report on ESG initiatives, their climate impact, and their progress toward net zero.