It was not too long ago when compliance drove data strategies in financial services institutions (FSIs). Many chief data officers (CDOs) also used compliance as a critical use case to get funding for associated data-related initiatives.
A new InterSystems survey showed that this might not be true anymore. The research titled “The Evolving Role of the CDO at Financial Organizations” showed 87% of executives are implementing strategic data management initiatives in 2021 to further key business objectives. These objectives include boosting profitability and improving customer outcomes.
AI also features prominently in their plans. Many FSI companies reported that AI-driven analytical cloud services drive their initiatives, enabling financial services firms to ingest massive volumes of data and gain a single view of accurate, consistent, and trusted real-time data.
CDOs are becoming more adept at using data-driven automation to manage compliance or governance initiatives. They are also leveraging new data management technologies and architectures, such as data fabrics, automated governance, machine learning, data lineage, and blockchain.
According to the survey, 69% of CDOs said their companies applied data lineage as a data governance technique, while 52% used crowdsourcing techniques. Sixty-three percent of CDOs are also implementing an analytics-driven business strategy.
However, compliance is still a significant focus for many FSI companies. The research showed 88% of these companies devoted 40% or more of their total data practice budget to compliance functions. When examined further, 70% of CDOs said risk data aggregation was the primary concern, while 69% pointed to “Know Your Customer” as to where a lot of time and effort is spent.
Part of the problem is that many FSI companies still risk data aggregation manually. According to the survey, 54% revealed that at least half of compliance functions are still performed manually within their organizations.
“Financial services organizations are striving to gain a competitive edge, deliver more value to customers, reduce risk, and respond more quickly to the needs of the business,” said Ann Kuelzow, global head of financial services at InterSystems.
“This requires leveraging data to its full effect — and the research shows that there is still more work required on defensive data management and automating compliance functions, as well as the more strategic ‘change the bank’ types of initiatives that could have a significant impact on their operations,” she added.
Image credit: iStockphoto/marchmeena29