data held hostage

Is Your Data Being Held Hostage?

More and more financial institutions are investing in developing their own analytics teams. Data warehousing and other modern analytics platforms are becoming the norm and not the exception. As these organizations start to develop their data strategy and implementation roadmap, some of them find that their data is being held hostage.

What do I mean by that?

Let’s assume that you are running a CRM system, for example, that is on-premise. More likely than not, the data for that CRM system is being held in a SQL database. Getting data out of a SQL database is easy in the world of data warehousing and analytics.

Now, let’s assume you are running a loan origination system (LOS) that is a hosted, third-party application. Except for a handful of exceptions, you will not be able to access a SQL database housing this data directly. However, your analytics team needs to get this data out of the hosted environment. You likely will call up the vendor, and they will give you a quote for how much they will charge you to provide you with your data.

Let me repeat that. They will give you a quote for how much they will charge you for YOUR data.

Avoiding Data Hostage Situations

Access to data is typically an afterthought in the product evaluation process for new software acquisition. As more organizations take steps towards becoming data-driven, the need to have easy access to their data will become even more critical than it already is.

Data access, then, should become part of the software evaluation process – a forethought instead of an afterthought.

Most vendors have the means to provide the data to you a number of different ways. By waiting until after implementation, however, data access becomes a product and/or service increase as opposed to an existing feature of the software acquisition. This is typically where you receive a quote for how much it will cost to have data delivered to your organization.

Some of you may be reading this saying “but I can access all the data I need from a web portal they’ve provided to me.” In that situation, reports must be manually opened and downloaded if you want to do anything with that data. Your analytics team will need data automatically downloaded or transferred to a specific location on a regular (usually, nightly) basis. Access to a reporting portal that requires manually downloading of reports and data is insufficient for a data-driven organization.

Key Point: Negotiate access to raw data at the beginning of the software acquisition process not after it has been implemented.

Ways Data Can Be Delivered

Most vendors have several ways of automatically delivering data to your organization:

  1. SFTP (Secure File Transfer Protocol) – a secure way to send files to and from vendors. For those vendors that cannot allow direct access to a SQL database, this is usually the most common delivery method.
  2. SQL Replication – some applications (shoutout to MortgageBot) will set up a replicated SQL instance on your network. Put simply, they are putting a copy of the production database on your system for reporting purposes. This a dream come true for analytics teams that need access to raw data.
  3. Physical Copies of Database Backups – some vendors are able to send you a physical copy (i.e. encrypted external hard drive) that contains a copy of a SQL database up to a certain point in time. Then, they can SFTP over backups and/or log files that update the database. A hybrid of the first two options, there is a bit more work in this solution, but it is still a viable option
  4. API – as credit unions and community banks start to build their own development teams, APIs are becoming more commonplace. Think of this as the language through which a development team and an application could communicate. Depending on how open the API is, this may be a sufficient option to gather the raw data required by your analytics team.

There are few other delivery methods, but, for the most part, they are derivations of the methods already mentioned.

As you are negotiating or re-negotiating with your vendors, make the conversation about data access and delivery a priority. Some of the most successful financial institutions are achieving their success through their increased use of data analytics.

Avoid having your data held hostage and make data access a priority in all software evaluation processes.


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Posted in Analytics, Banks, Credit Unions, DW/BI.

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