What is integrated data management? Why is it critical for the financial industry today? We discuss in this primer.
Financial institutions deal with a lot of data as they have to maintain updated records of their customers as well as track and review all the transactions that are being conducted through their respective organizations. Unfortunately, many companies that belong to the banking, financial services, and insurance (BFSI) sector still face plenty of challenges when it comes to efficient data storage and collection.
According to a survey conducted by leading solutions provider Oracle, many organizations still consider the storage of information in disparate systems as one of the leading issues that prevent them from leveraging regulatory data as a reference for making strategic business decisions. This is a common problem among financial institutions that still rely on data silos, which is a system of managing data in a way that is not easily accessible to other departments within the same organization.
The Rise and Fall of Data Silos, and What Comes Next for Data Management in BFSI Companies
Data silos are a popular way of managing information within organizations where competition is part of the culture, where the hierarchical structure is the norm, or that don’t have access to better technology for collecting and storing data. While this data management system has sufficiently served its purpose in the past, it is putting many organizations at a disadvantage in the age of big data. Data silos serve as a hurdle for consolidating information, thereby preventing visibility and discouraging collaboration. Financial organizations can best benefit from setting up a modern data foundation that’s designed for improved transparency and agility as well as real-time data accessibility and collaboration. In addition, it adheres to a higher standard of risk management.
Adopting future-proof data architecture that favors integration and collaboration is a big step, even for large financial institutions. However, the benefit that integrated data management systems bring to BFSI companies cannot be overstated. Here are just some of the capabilities that an organization can unlock and maximize once they make the shift from data silos to integrated data management systems:
Respond to Their Customers’ Need for Highly Relevant and Contextualized Experiences
Unlike the previous generation of customers that are satisfied with standard products and services, today’s tech-savvy generation demands highly personalized plans from their financial services providers. To meet this expectation and come up with products that can be personalized in an instant, BFSI companies must collect a wide range of data on their customers and find out how their products are being used. This is essential in designing modular products and services that can be configured to meet the specific needs of individual customers but without the downside of further complicating the company’s internal processes and systems.
Address Growing Data Security Concerns with a High level of Efficiency
Financial institutions face more security threats these days, and failing to meet this growing challenge can mean hefty sanctions from regulatory bodies and reputational damages due to involvement in data breaches. Now, a company’s security system is only as strong as its weakest link. To improve their security, decision-makers must have a clear overall view of their data systems so that they can easily identify weak links that financial criminals can exploit. Moving from siloed to a more integrated data architecture is essential in revealing these weaknesses and addressing them before they are used as an entry point by malicious entities.
Make Quick Business Decisions That Are Based on the Latest Data and Trends
The speed by which a company can access and analyze its data is integral to designing timely products and rolling them out to meet the needs of waiting for customers before the competition can do so. Now, BFSI companies will not be able to speed up their product creation processes if they still face many hurdles in collecting and accessing customer and product use data. Shifting to an integrated data management system will enable decision-makers to easily and quickly fetch data that will reveal the improvements that they can apply to their previous products and the trends in how their customers utilized the said products. This, in turn, will help them create releases or update products that will adequately meet the needs of the market as soon as possible.
It’s high time for BFSI companies to consider data as a business asset, but they can only maximize this resource if they have the right data management system at the tip of their fingers. Financial organizations that still rely on legacy data management systems are at the risk of running behind the competition and completely missing out on the benefits that will eventually become the standard for the BFSI sector and the markets they cater to. It’s essential, then, for companies to prioritize their transition from a siloed data management system to an integrated one that allows them to harness the maximum potential of big data.