At the helm of an organisation’s strategic direction, performance and growth trajectory, the C-suite team holds massive responsibility towards employees, customers and shareholders. For banking and financial services companies, the stakes get higher – pre-pandemic, the financial services industry contributed £132 billion to the UK economy in 2019 and, consequently, will also play a major role in post-Covid economic revival. There is little room for costly mistakes or delays.  

That’s why decisions made at leadership level must be informed by solid, relevant data-led insights rather than instinct or by relying on what has worked successfully in the past. In the wake of Covid-19, and with the full economic effects of the EU referendum still ahead, the old rule book is not fit for purpose and predicting outcomes based on guesswork is an outmoded approach.

Data and its applications are gaining considerable attention already in the sector, summed up well by the Bank of England – “Without the data we collect, we cannot identify risks, design good policy, and take action in a timely and targeted fashion”, with the statement also noting that “technological advances and automation mean that more data than ever before is being created and captured. Simultaneously participants across the financial system…expect more high quality, timely data to guide them in their decision making.”

Wider afield, the majority of sectors are still at a very early stage of using strategic insights garnered from data to drive growth. Recent research shows that, in terms of their data journey, 63% of companies surveyed were largely focused on improving data quality and governance. However, the greatest, most tangible payoffs will come once leaders make a decision to pivot away from data management and hygiene, towards a future where they are making focused, deliberate efforts to harness their data to address specific goals and KPIs. The same report finds that those who have a longer-term strategy in place anticipate adding value to their business through higher productivity (60%), cost reduction (47%) and better customer engagement (46%).

Implementing data analytics to gain a full view of the company can highlight specific areas that require immediate attention and can bring measurable results – for instance, helping management teams see how to direct budgets into new investments where they will deliver the best ROI. Further, AI-powered predictive analytics can be a game-changer in identifying and preventing potential risks before they happen, optimising cybersecurity or fraud prevention – a growing concern and priority across financial markets.

The potential benefits of a data-centric business model range from boosting operational and cost efficiency and revenues, to informing hiring strategy, customer engagement, risk management, governance, reporting, lending decisions and forecasting. Further, it opens up access to more exciting developments, such as quickly spotting opportunities and gaps and acting on them, targeting new market segments (think Lloyds Banking Group’s recent strategic entrance into the private rented sector), making timely product enhancements, plus directing leaders’ attention to synergistic cross-selling, partnership and acquisition possibilities.

Importantly – and here we can take note of the CPG (consumer packaged goods) industry as a strong example of data-led done right – data analytics can boost customer acquisition by deepening leaders’ knowledge of consumers’ exact needs based on real-time information. This leads to more informed, accurate, faster personalisation, which in turn strengthens customer trust and retention. Within the financial domain, it’s the Cloud native neobanks that are leading the charge, such as insight-led Revolut. The company has become the UK’s most highly valued start-up and is replicating in the US market its model of unlocking, and catering directly to, customers’ precise needs via data analytics.

Instilling a data-first company ethos starts at the top

Once accepted at the Executive level, the senior team’s next step is to ensure that full understanding of the transformative power of data insights filters through to all departments. This might require a radical culture change as, traditionally, data analytics was considered an obscure IT issue. To aid its transition into a company-wide priority may require internal changes such as hiring a Chief Data Officer to be the driving force of that education and attitude shift, or staff training and upskilling to cultivate a truly agile, unified and cross-functional company structure.

Simultaneously, executives can consider the kind of structural upgrades that can support the above. This means eliminating departmental data siloes and ensuring that everyone in the business is working towards common objectives. That involves phasing out legacy systems by incrementally introducing the Cloud-based digital infrastructure that can enable disparate, unstructured or siloed data to be aggregated into a data lake. From there, it can be mined most effectively.

Once these foundations are in place, top of the agenda is to decide upon precisely what insights the leadership team hopes to arrive at, before utilising AI-powered analytics and the automation made possible by Cloud technologies to get the most valuable conclusions based on those key questions. From here, the company is well placed to capture opportunities as they arise, build resilience and mitigate unforeseen events faster and with greater agility.

Today’s landscape is complex to navigate. Consumer behaviours and needs are evolving fast, the volume of data and its sources will continue growing exponentially, competition is coming from multiple directions and regulations are changing to consider new uses of data. The ability to process and harness data well is therefore a crucial immediate priority for boards and senior teams. It’s also an arena where transformation will really ramp up in the financial services space within the next five years. Companies that put data insights front and centre now will be the ones to dominate the market at that stage and elevate their business to the next level of growth.