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The global pandemic has posed an unprecedented array of challenges to all industries and the financial services (FS) sector is no exception. In response to this, a myriad of businesses within the sector have experienced a ‘tech awakening’, incorporating cloud-based services to facilitate optimal customer experience and bolstering remote working capability. Research undertaken by global consultancy McKinsey predicts that within the next decade, anywhere between 40-90% of banking operations may become cloud based. The aforementioned circumstances imposed by COVID-19 are fated to further accelerate this transition.
Based on this tectonic shift towards data driven technologies, one could presume that the C-suite executives of the financial sector are thoroughly confident in their ability to use data in decision-making. However, recent research has exposed that the primary concern is actually inferior access to data, when compared to other industries. This is of major significance when considering the gravity of decisions being made by financial leaders, especially at a time of economic turmoil.
More than a feeling?
In order to address peoples’ and businesses’ unprecedented levels of financial uncertainty, banks have accentuated their customer support offering – something that is expected to continue as the economy strives to recover. Everything from job loss to investment uncertainty has left customers in dire need of advice. It is shocking to learn that 45% of financial service leaders offered such advice and decisions on the basis of ‘gut feel’.
Not least because of potential long-term implications arising from poor decisions, the individuals making these ‘gut feel’ recommendations are being subjected to undue pressure. It is in situations like these where the power of data to inform and qualify decision-making could prove invaluable. So why aren’t they using it?
Gotta go fast…
In the world of financial services, speed is paramount.In this industry, 84% of decisions need to be made on the same business day and often in under 15 minutes, a faster turn around than any other sector.
Unsurprisingly, our research confirmed that speed was the main reason why banks did not turn to data insights before critical choices were made. Moreover, many financial services leaders claimed that they did not feel there was sufficient time to garner additional information from their data in many cases.
Amidst the rapid digitalisation of the financial sector, this data scepticism cannot continue. The priority must be for organisations to create seamless and well-ordered access to their data that does not put employees off consulting it, in order to save time. Hopefully, this will mark a shift in the number of decisions made on gut feel to more based on insightful data.
Be loud and proud with data
Closely linked to people shirking data usage is simply the stigma around relying upon it. Over a third (40%) said they weren’t made aware of the existence of further data and 25% admitted they were too embarrassed to ask for more data. Such findings elucidate the need for a shift inthe culture of how businesses in the sector interact with the data insights generated every day.
It is crucial that financial sector employees are adequately supported and emboldened in their business goals. No longer can companies overlook the huge potential locked in data that may have been forgotten – so called ‘dark data’. This brings the associated benefit of a happier, healthier and more confident workforce alongside greater accuracy and information. The result might just be the competitive edge banks need at a time of transition and insecurity.
What comes next?
What we currently see is that the volume of data created in the financial services industry is not an issue. Instead the obstacles lie in how actionable data insights are for employees, how informed they are about data’s very existence and the culture behind using it. Having embraced so much technology in recent years to transform the industry, the answer still lies with technology, but it is about the simplicity of user interaction. A cohesive approach that brings all company data together in one place.
Addressing this challenge is especially important as we enter the recovery stage of the pandemic. And in order for the financial services sector to help its customers through this crisis, they need to ensure that they are not relying solely on gut feel to provide advice.