Financial services must put people at the heart of their data strategies

Financial services (FS) companies have, for several years, been capitalizing on the power and potential that data and technology promise to deliver – from using it to enhance customer loyalty, to developing new products, and improving risk management.

Over the next five to 10 years, though, Accenture predicts that disruptive technologies will “change the shape of the financial services workforce” as we know it. So, are organizations and their employees prepared for this next wave?

FS companies have faced an ever-increasing plethora of challenges – from competing with digital native start-ups, to keeping up with constantly changing regulations. The COVID-19 pandemic will certainly leave its mark on the sector too. In our current climate, it has therefore never been more important for FS organizations to make strategic decisions with confidence and harnessing data effectively is critical to this.

Finance and insurance firms have previously recorded the third highest corporate data literacy (CDL) score out of 15 sectors, which judges the ability of an organization to read, analyze, utilize for decisions, argue with and communicate data. Added to that, 49% of employees in finance related sectors say they already make decisions using data on a daily basis, according to The Human Impact of Data Literacy, a report from Qlik and Accenture on behalf of The Data Literacy Project.

FS employees lacking in data confidence

However, knowing they need to use data properly and being able to do so are completely different matters.

The Human Impact report also revealed that just 38% of FS respondents say they are fully confident in their ability to read data, putting the sector behind the likes of engineering (42%), advertising and marketing (43%), consultancy (53%) and science and technology (54%). More strikingly, less than a third (29%) of FS employees say they feel fully prepared when entering their current role to effectively use data to do their job better.

That is not to say employees do not see the benefits of working with data – 90% see its use in the workplace as an asset. What it does suggest, though, is that FS organizations that are pushing ahead with becoming fully data-driven run the risk of alienating those employees that are not at the level their employers expect, or worse, assume they are.

The result? A lack of confidence in their abilities to manage data leads 51% of FS employees to feel overwhelmed and unhappy at work when reading, working with and analyzing data at least once a week. For some, this can manifest itself into avoidance tactics – more than a fifth (21%) say feeling overwhelmed with data leads them to avoid doing the task altogether.

Having a fifth of the workforce avoid tasks will certainly have an impact on a business’s ability to use data appropriately. It is therefore incumbent on employers that they recognize the needs of employees, and act accordingly. With two thirds (68%) of FS workers stating their actions are mostly triggered by insights derived from data, having both the skills and the tools to do so effectively is vital.

Five steps to become more data-driven 

So, how can FS organizations put people at the heart of their data strategy to unlock the potential for data-informed decision making? Here are five steps:

1. Appoint a data champion responsible for driving tangible results: Typically a Chief Data Officer (CDO) or Chief Information Officer (CIO), their role would be to act as a data ambassador across the organization, working with stakeholders to identify opportunities to better use data across functions and at every level, and establish a change management plan to successfully implement them.
2. Be prepared: Data champions must gain a holistic view of employees’ use of data and their data capabilities in order to identify and dictate the investments that will empower employees to deliver against the organization’s goals and for the enterprise to action.
3. Arm employees with the right tools: It’s essential to work with the CTO and CIO to ensure that the data tools available serve the needs of each user, across every team. Tools that are put forward for business users must meet the following criteria: provide relevant information; present information in a digestible way; and be able to be embedded into existing software. As Lee Raybould, Chief Data Officer, Nationwide Building Society, says: “Most general Business Users actually need quite simple information, presented in an easily consumable way, that allows them to make a better decision. The notion that a frontline customer-facing employee needs or wants to spend lots of time analyzing information, is just not realistic if it doesn’t directly contribute to how they do their work”.
4. Educate to improve data literacy: 38% of FS respondents think that data literacy training would help them be more productive, while a fifth think it would help them reduce stress. Data literacy training can take many forms, with some integrating it into existing skills initiatives, while others provide standalone e-learning courses or specialized classroom training for staff. However, it should always be a continuous learning program to ensure that skillsets are continually reinforced and developed.
5. A constant state of evolution: To extract the greatest value from data, FS organizations must be constantly exploring where the new opportunities are to better inform processes and decision making. This is what the Human Impact report calls ‘a culture of co-evolution’ – the concept that sources of data are forever changing, and so organizations need to be comfortable transforming in parallel.

People at the heart of successful data strategy

Established players in the FS sector know they need to transform to combat the threats of new entrants, and to be agile in how they tackle the changes of finance in the digital era and challenges that may arise. This is certainly being tested in our current climate.

Data is a critical part of that ability, but the understanding and use of data in a business is as much about having the right people as it is about having the proper tools and technologies. That’s why it’s so important that FS organizations continue to improve their employees’ data literacy, endeavor to tackle any confidence issues when it comes to working with data, and ultimately empower their workforces to work with data to the best of their abilities.