Is your data a liability or an asset?
Data. It’s the lifeblood of any business. We can’t stress it hard enough. But in the high-stakes world of finance, effectively managing data is an unseen power move that can make or break your business, depending on how you play your cards.
Think about your data as the foundation of your financial decisions. If poorly organised, inaccurate, or scattered across different systems, even the most brilliant business strategy will not save it from potential collapse. The reality is that 40% of businesses (according to Gartner) fail to achieve their objectives due to poor data management. The firm also revealed that poor data quality can set one back USD 12.9 million per year.
Without a single source of truth, you open the doors to potential data misuse. Bad data can lead to bad decisions. If you can't trace the origins and connections of your data, with no clear roles and ownership, then it becomes difficult to figure out what went wrong (or who to blame). On the flip side, Sirius Group mentioned a whopping 70% increase in revenue for those who get it right.
Top five pillars of effective data management
Financial success is closer than you think. Focus on these five key pillars to transform your data from a potential liability into a powerful asset:
Data quality: This is the foundation of trustworthy decisions. Having accurate and reliable data is essential for making good decisions, managing risks, and following the rules. To avoid mistakes and stay compliant, banks need to have processes in place to check, clean, validate, and monitor their data regularly.
Data lineage: Data lineage is about knowing where data comes from, how it’s transformed, and where it goes throughout its lifecycle. Banks must be able to trace and verify the sources and changes made to their data to ensure its integrity, follow regulations, and make auditing easier.
Metadata management: Metadata is like the instruction manual for your data. It tells you what the data means, how it’s structured, what it’s for, and how it’s used. By organising and managing metadata well (think data dictionaries, catalogues, and repositories), banks can discover and integrate data more easily, and ultimately, make data-driven decisions faster.
Data standards: Data standards are like a universal language that helps different systems communicate and work together smoothly. By adopting standards like ISO 20022 or FIBO, banks can ensure their data is consistent, accurate, and can be easily shared with others.
Data security: With cyber threats constantly on the prowl, encryption, access controls, multi-factor authentication, and data masking become non-negotiables for protecting customers' and banks' reputations.
It's not just about tidying up spreadsheets and crossing your fingers. In today's data-driven world, you need to be in control. With the right strategies in place, you'll be able to see patterns and trends that others can't, helping you make smarter decisions for your business.
To discover how you can effectively manage your data, feel free to reach out to our data expert, Yoong Chung, Associate Partner, at yoong.chung@synpulse.com.
What's next?
Next week, we’ll talk about effective data governance strategies. Stay tuned for more industry-leading insights, straight from our experts to your inbox every Friday. Don’t miss out!