For years, financial Institutions have been using data analytics to seek out opportunities, reduce costs, create efficiencies, make better and faster decisions, and ultimately improve the customer experience. Though many have begun the data analytics journey, most are not getting the most value of their data analytics initiatives. To be fair, it’s not the easiest process. You must build the right infrastructure to capture data. Then, you need the ability to access and extract data. Lastly (and most importantly), you have to convert the data into meaningful insight with the goal to create real business opportunities.
Today, with the increased focus on data management, data protection, and analytical competency, many financial institutions are finding gaps in their data program and are discovering they don’t have the right skillset to manage all facets of their analytics initiatives.
Enter the Chief Data Officer.
The CDO has proven to play a significant role in helping many FIs steward their data, drive operational intelligence with data, and generate real business value by monetizing data assets. Historically, IT departments were responsible for most of the big data and analytics projects. But as the push to deliver insights from the data has become a major driving force behind data and analytics projects, the role of the CDO has become crucial. According to Gartner research, by 2019, 90% of large global companies will have an appointed CDO. (1)
Why a CDO?
Not sure if your organization needs a CDO? If considering adding a CDO to your org-chart, it’s important to be able to make the distinction between your existing data analyst, data scientists and CIO. While data scientists typically have backgrounds as mathematicians or statisticians, CDOs should have a background in the financial services industry, know your market and combine that with a technical understanding of data and its potential for reaching growth goals.
Here are six advantages a CDO can bring to your financial institution:
Develop a Data Strategy
Data analytics is a powerful enabler for fraud detection, business intelligence, marketing insights, product research and so much more. With massive volumes of data flowing through the FI every day, it can be difficult to decide what data to keep and analyze. A CDO makes those key decisions as part of an overarching data strategy. They can help with mapping out goals, monitoring progress, and fine tuning the strategy as needed.
Enhance Data Governance
The CDO bears the responsibility of stewarding the data and ensuring data quality. They help implement proper data management and data governance systems and processes to ensure data is trustworthy, reliable, and available for analysis across the financial institution.
The CDO will help find ways to use existing data to uncover new business opportunities, solve business challenges, and dive deeper into other insights that produce new sources of revenue tied to data.
Oversee Data Protection: Risk management and compliance with customer data are major issues among regulators, and the CDO can assist to ensure compliance and reduce risk. The CDO helps define the information management strategy to meet compliance demands; and shares information with the chief risk officer. If your FI lacks a dedicated compliance team, then a CDO can become a major contributor towards this function.
Manage Data Operations
A CDO makes key decisions around the storage, handling, and use of a FI’s data, including the type of platforms used, connections to/from production applications, analytics processes, and efficient flow of data.
Enhance Data Communications
Ultimately the CDO is a liaison between other departments. The CDO will work closely with the IT department, yet help with strategy in marketing, operations and many other functions throughout the FI. The CDO will collaborate with other departments, while overseeing goal setting.
Not sure if you should hire a Chief Data Officer yet?. Let The Knowlton Group act as your outsourced Chief Data Officer. Your financial institution will receive a trusted advisor and a strategic partner to enable you to leverage the massive amounts of data flowing through your organization. We will work with you to create long-term strategies for growth, top performance, and carve out a competitive advantage. Our mission is to help transform your organization into a data-driven organization. Contact The Knowlton Group today by email at firstname.lastname@example.org to learn more!
1. Gartner Estimates That 90 Percent of Large Organizations Will Have a Chief Data Officer by 2019, January 2016. Gartner Press Release