Source: RSM US LLP.
ARTICLE
For many organizations, gathering data is not difficult. However, collecting the right data and harnessing its full power can be more challenging.
For financial institutions, data is vital for innovation. Accurate data helps financial institutions make smart decisions, identify opportunities for growth and address potential risks. However, financial institutions often encounter obstacles that limit their ability to retrieve and use data to enhance efficiency and improve the customer experience. These obstacles include the following:
- Limited access. Financial institutions may not be able to get important data quickly.
- Inadequate resources. Antiquated technology, or limits to employees’ skill levels, can result in data that is disorganized, incomplete or buried.
- Siloed systems. Fragmented data across disparate systems, departments and vendors makes it difficult to obtain holistic insights.
- Lack of quality control. A lack of relationship-level data and inconsistent procedures for core-system data can result in poor quality.
- Technological complexity. Rapid advancements in technology add complexity, making it hard for financial institutions to keep pace with evolving data analytics capabilities.
Financial institutions can overcome these obstacles by prioritizing data analytics, which offers numerous benefits. The journey starts with basic data extraction and moves toward advanced stages of data utilization. As financial institutions progress along this journey, they reap more benefits, enhancing their operations and providing better service to customers.
The many uses of data
Financial institutions need to invest in platforms that make data easily accessible and usable while maintaining its quality. A comprehensive data dashboard solution, for instance, can help banks and credit unions tap into information to create daily, real-time views of account holder activities and other metrics. This type of data analytics tool enhances decision making, and financial institutions that intentionally harness their data are better equipped to identify patterns and trends, forecast business outcomes and form goals.
Organizations can use advanced data analytics to:
- Improve existing products and create new products and services.
- Personalize product offerings and tailor services with the use of customer transaction data.
- Consolidate customer data from multiple sources to better understand customer segments and their related channel distribution.
- Analyze opportunities, successes, misses, win rates and other criteria to create forecasts.
- Synthesize both internal and external data to drive real-time decision making and improve organizational performance.
These initiatives highlight the importance of data analytics for financial institutions, which require comprehensive platforms for data aggregation, analysis and visualization. Institutions that embrace data analytics gain a competitive edge, enabling them to enhance customer engagement, target services more effectively and streamline their processes. Depending on the application, these potential use cases can boost product performance, improve sales and increase win rates. In this way, financial institutions can unlock the full potential of their data, enabling them to stay ahead of the curve in an increasingly digital world.
The takeaway
Data is an important resource in the digital age, as crucial as oil was to the Industrial Revolution. Much like oil, data is abundant and valuable, but it is useful only if extracted, refined and used effectively.
Financial institutions must recognize that data can no longer be an afterthought—it is a necessity for organizations looking to thrive. Data analytics is a strategic imperative that can create momentum for the entire organization and create a pathway to a successful future. Now is the time for financial institutions to acknowledge the power of data and seize the opportunities.
This article was written by Aaron Donaldson, Brandon Koeser, Jeff Dunnahoo and originally appeared on 2024-05-09.
2022 RSM US LLP. All rights reserved.
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