How data is powering success in financial services


Data empowerment is a crucial issue for financial services organisations embarking on the digital transformation journey

Digital transformation is having a big effect on the financial services ecosystem. From how businesses operate to how they serve clients, organisations in this sector are striving to become more customer-centric, data-driven, efficient and agile. While this creates challenges, it also presents growth opportunities. 

Data is at the heart of this process. The goal is to create a data-rich, data-empowered corporate environment. Right now, organisations have only just touched the surface of what digital-driven technologies can do in financial services. The fact is, there is no blueprint for what success looks like.

The good thing is that data, digital and business transformation have been elevated to the boardroom agenda. Strategists in this profession now steer the course of their organisations. Every business is trying to fully engage digitally and be more data empowered. Yet the sheer volume of data generated is an issue because only a small amount is utilised. Structuring that data is also a challenge. At the same time, financial institutions must deal with data silos, legacy systems and prioritising change. 

“You have to know what a business wants to achieve through this kind of transformation. These days it is about lifting the aspiration of organisations and clear objective-setting at a higher level,” says James McLaren, director and industry advisor for financial services at Salesforce.[1]   [2] 

He adds: “No business wants to feel underwhelmed by the goal they achieve in two to three years’ time. The question is, is the transformation an ambition that will pay dividends, given the amount of complexity that exists in many organisations?”

Not a quick fix 

Many financial services companies believe the transformation to a data-driven business will occur over a long period, beyond quarterly reporting, results and demands. They are also beginning to realise that the digital transformation journeys for their organisations won’t be solved by a quick-fix IT project. This journey has huge implications on the wider business, how it functions and how employees interact with customers, data and resources. It represents a fundamental evolution relying on significant investment to boot. This starts with the realisation that data is a core and strategic asset. 

“We do have a data problem. Every single day we get exponentially more data. And every day we don’t consume exponentially more of the stuff because humans are the limiting factor in terms of how we can consume that data. This challenge has therefore shifted into a human problem. Insight is lacking, so how do we make it easier for humans to get insight from data?” asks Jet Lali, chief digital officer at State Street. “We’ve got the data; you just don’t get enough actionable insight.” 

A substantial amount of data in financial services today remains unleveraged. By some estimates, businesses use only 0.5% of available data, according to PwC. A lot of reasons are given. Data is in silos, as well as incompatible formats, then there are privacy concerns, as well as the spectre of GDPR regulations. Since data is now recognised as a ‘people problem’ there is increasing realisation that leveraging it requires new skills and mindsets, as well as novel ways of thinking. 

“The reason why not a lot is being done is because the level of data literacy among employees is variable. I think this is a generational issue. Within two to five years, we will see this starting to shift, because the cohort coming through university is equipped very differently. Data is just another language. The next generation are more attuned to this. Soon we will see a different data landscape,” says Ling Ling Lo, EMEA head of Nomura’s group data office.

Those spearheading change in the financial services sector are looking to get more value from their data ecosystems right now; make it more usable, more accessible, drive more insight to help customers and clients, and empower employees in the future. 

“The concept of more actionable insight means we can move further up the value chain. We can start to deliver the insight that we have. It’s crucial in our organisation. Having a unique view of all the data that’s available is vital. We can then improve customer service through this process,” says Ben Green, global head of customer platform experience at the London Stock Exchange Group. 

A human challenge

The human challenges around data are immense, especially when it comes to delivering customer-centric services. Netflix, Amazon and Google have all heightened expectations across the board. “You have two forces pulling in opposite directions. On one hand, customers want personalised experiences, not a one-size-fits-all level of service. On the other, you need much greater privacy with the EU’s GDPR regulation. People are much more sensitive to what they will share, yet they kind of want both at the same time. It is an issue,” says Sami Helin, sales director for EMEA at Coveo. 

He adds: “This is where technology can help. Artificial intelligence and machine learning can learn from every interaction, every click, every purchase and then provide more tailored experiences for the customer, client or employee, deploying relevant content across all data and information available. AI can help generate personalised and tailored experiences.”

The level of data illiteracy and literacy among employees is variable. I think this is a generational issue. Within two to five years, we will see this starting to shift

The holy grail in financial services lies in the opportunity to shift the industry from having a standardised product and service offering to being a truly customer-centric sector focused on helping people achieve what they want to with their money, whether the customer is a massive financial institution or an individual pensioner with a small savings pot. 

“It’s about creating the right client experience by really understanding your customer, helping to ensure that when you talk to them, you’re engaging with that person at a time that suits them, in the right possible way, through the right omnichannel mechanism. And most importantly, that you’re talking to them about something they really need,” says Sarah Walker, head of data at NatWest Markets. 

Time to empower employees

Organisations are looking at how they can empower employees to serve their customers better. Herein lies one of the biggest opportunities for the financial services sector. The sweet spot lies in allowing data insights to complement the human services offered to clients, marrying the best of technology, data and people. 

“Our future is around augmented advice for our clients. What we’re going to be doing with our data is augmenting every part of that journey, both for the client, but also for employees. For me, it’s using data to provide amazing client outcomes, but also amazing employee outcomes, so you get the right advice. It’s super exciting,” says David Espley, chief technology officer at Hargreaves Lansdown. 

What it does mean is that technology deployments within firms need to work harder for the people that use them, not the other way around. The aim is for employees to be more empowered, with access to the right tools to help people be better at their job. This is a key outcome, rather than any other metric.

“We have 24,000 people globally who are all focused on delivering great products and services for our customers. To enable them to do so, we’re focused on helping our product managers on their journey as they continually develop and grow. To achieve that we invest time to understand their current capabilities and needs, any gaps, and how technology can help to address those gaps, enabling our people to be more effective and more successful,” says Thomas Harris, senior vice-president, product lifecycle management lead in Mastercard Foundry, the company’s R&D arm.

Questioning the value of data

Reframing and questioning how data is deployed is also crucial in this process. It must answer the needs of an organisation and how it serves the customer. Organisations beyond financial services are already doing this. It offers a template on how to engage going forwards. 

“Why are viewers on Netflix, 75% to 80% of the time, consuming content that they haven’t asked for? Artificial intelligence is enabling the streaming service – and other organisations – to anticipate questions and say this is the answer to the question that you should have asked,” says Ben Wild, enterprise sales at Coveo. 

He adds: “The data is therefore helping organisations to understand this is what has worked before, this is the profile of the individual, the client, and therefore these are the things that are likely to be pertinent to them. It’s about stepping in front of the question and offering up answers. This offers significant opportunities for financial services.” 

The concept that data and technology can be used to offer up something more, something insightful and meaningful to clients in the finance and banking sector is only starting to be explored. It offers great potential and is a work in progress for many. The focus is on technology, processes and data insights working for people, not the other way around. 

“The idea is to create a customer experience that is something akin to an artist’s palette. It involves creating a workbench, which will attract people to come into this environment so that they’re free and happy to have their behaviours analysed, learnt from, and then shared,” says Green. “Then to use that fantastic power of learning to nudge people further up the product, service and value chain that we have, not just because it’s good for us commercially, because it’s good for them because they’ll constantly be seeing better outcomes.”

Empowering whole organisations

This workbench of data-empowered services doesn’t just entice customers, it also has the potential to elevate the business intelligence of company-wide workforces within financial services. Historically, managers and C-suite executives were the most empowered in organisations. They made decisions based on experience and gut feeling. They were the ones with reports on their desks, where knowledge was retained not shared. Now, every employee can be data-empowered, it doesn’t matter what role they play in the business. 

“In the past, the team at the top told everyone else what to do because they were the most experienced, and that database of collective anecdotal knowledge drove decision-making in your organisation. Then you had little data, so, businesses adopted this approach. Today, everybody in an organisation, regardless of professional experience, is empowered with almost identical information. That has dramatic implications for how you optimise a modern corporation,” says Lali.

He adds: “I think this is going to lead to some fundamental changes in how businesses are organised. It’s becoming a competitive advantage for corporations to use all their employees’ insights and to use all their data.” 

Artificial intelligence and machine learning can learn from every interaction, every click, every purchase and then provide more tailored experiences for the customer, client or employee, deploying relevant content across all data and information available

Environmental, social and corporate governance factors are now increasingly embedded in the industry. The idea of diversity and inclusion when it comes to the customer experience is another issue. Not everyone uses a product or a service in the same way. This means the customer experience in financial services must be diversified. Companies are even moving toward customisation and personalisation of the customer experience.

“It’s impossible economically to provide individual services for each of us, each of our customers, or each of our employees. But smart technology can really help. AI and machine learning done properly are beautiful technologies, because they help humans, they help every individual because we’re all different,” Helin says. “They can help us make sense of the future.”

With data elevating the experience of both customers and employees, the sector will now be able to deal meaningfully with some of the most critical issues it faces today.