For financial institutions, data management is key

MOST Asian businesses are struggling with the proliferation of data. Instead of offering a competitive advantage, data has become a burden due to a host of barriers, including data skills gaps, data silos, manual processes, business silos, and data privacy and security weaknesses.

Financial services firms also face a variety of critical data challenges ranging from difficulties accessing data and getting it in the right format to using it to drive decision-making. With the wealth of data at hand, finance organisations are finding it more difficult to track and anticipate customer interactions, which not only impacts the overall customer experience but also creates challenges when it comes to attracting, retaining, and growing customer accounts.

There is an urgent need to break down the siloes that exist within their systems to ensure that data is being consistently used across the business, offering better variety, volume, and veracity of data. Let’s consider what business leaders can do to manage their data better.

Top challenges faced in financial services in Asia Pacific

In 2022, we surveyed Asian financial services organisations to find out their biggest technology and data challenges. We also wanted to explore how Asia-based firms can overcome the issues identified and ensure that their established data architectures deliver the capabilities needed to drive innovation and futureproof their organisations.

Our findings show that:

• Some 87 per cent of financial services organisations across Asia experience frustrations and concerns in using their data to drive decision-making, which is similar to the 86 per cent of institutions globally. 
• Their biggest data challenges were – not being able to report on all relevant data; not being able to get the data from all the needed sources; and delayed access to data.

The findings support the fact that transforming into a data-led organisation is far more complicated than business leaders might expect and delivering the right data to fulfil critical business needs is increasingly challenging. 

Some 98 per cent also share that there are data and application siloes within their organisation; however, only 21 per cent of organisations will prioritise eliminating data siloes within the next 12 months. And 68 per cent are unable to base decisions on near-real-time information less than one day old; 33 per cent are making decisions based on data that is between one and three days old, while 16 per cent are relying on data that is between four days and a week old.

The positive side is that a majority (54 per cent) cite mastering data management as one of their highest technology priorities for the next 12 months.

Next generation data management solutions can help

Data contains valuable insights critical for business decision-making today. Successful organisations recognise data as a strategic resource requiring strategy to decipher those insights into inputs that can drive action.

Implementing modern data management technologies and approaches will provide organisations access to a real-time, consistent view of the data from different sources, giving business leaders a more complete and comprehensive view of the organisation supported by more insightful analytics. In other words, it will provide organisations with more diverse and current data, delivering better insights. There is no one-size-fits-all approach; the strategy must evolve continuously with the business’s priorities. This will give them the resilience and agility needed to survive, thrive, and gain a competitive advantage.

One of the modern data management technologies that Asian organisations can easily implement to address the challenges they are facing today is smart data fabrics. A data fabric is an architectural approach to data management that speeds up and simplifies access to disparate data across the organisation. It retrieves, transforms, and harmonises data from multiple sources, on demand, to make it usable and actionable for a wide variety of initiatives.

It eliminates stale data and lets organisations incorporate real-time event and transactional data into processes as well as reporting and analytics functions. This also helps eliminate errors and missed business opportunities. Subsequently, organisations gain more accurate, current, and comprehensive information.

According to our study, 79 per cent of Asia financial institutions’ business leaders would consider implementing a data fabric to simplify access to distributed data and address data siloes.

Using modern data management solutions will help in all aspects of the business – this ranges from improving reporting and management of enterprise risk to getting a better understanding of cash flow, identifying bottlenecks and inefficiencies, improving processes and productivity, enhancing competence regarding regulatory compliance, and a bigger view of their customer journey and institutional client activities.

Turning data into valuable insights

If left unaddressed, the current data challenges experienced by financial services firms across Asia and globally will significantly impact their ability to meet business objectives and improve issues such as customer retention and risk transparency.

Amid ongoing disruption, sudden market changes and unforeseen circumstances, the ability to access and use real-time data will also give the firms the resilience and agility needed to survive, thrive, and gain a true competitive advantage.

The writer is country lead at InterSystems