The financial services industry has long used data to inform decisions. Uncovering patterns makes what was once a subjective, often complex process more objective — that is, if the analytics are applied to business decisions, which isn’t always the case.
The holdup can be traced to the methods of sharing information. According to a recent Exasol study, most data insights come by way of dashboards. However, more than half of business leaders and data professionals say these dashboards aren’t as readily used as they should be. The information provided is just too difficult and time-consuming to interpret.
That’s where data-driven storytelling can help chief financial officers and other leaders.
The storytelling isn’t a replacement for a traditional dashboard. Yet, when you add a narrative and visuals to the analytics — the crux of data storytelling — it becomes much simpler for everyone to understand and comprehend the data in front of them. They can read the “why” between the lines.
It also becomes much easier to convey complex details in more accessible and engaging ways. Suddenly, the information is much more relatable, if not impactful, and team members walk away from conversations with clear next steps for achieving business objectives.
Why CFOs — and Other Leaders — Should Spin a Story from the Data
Being a successful strategic CFO hinges on the ability to build a data-driven narrative around current costs and future forecasts, showing how the company — bank, credit union or fintech — can achieve its vision.
Need to improve efficiency?
Weave real-time financial information into a compelling data story that not only arms the team with insight on the need to control spending and the ways it can be done — but inspires their support.
The days of CFOs as keepers of the checkbook are long gone. They’ve become stewards of organizational assets and active participants in the direction of corporate strategy, all while navigating this post-pandemic and uncertain economic landscape to not only sustain business growth, but also encourage prolonged profitability.
Real-time financial information allows CFOs to craft a compelling data story that helps the rest of the leadership team understand and control spending — a critical initiative for any organization focused on improving efficiency.
Besides, properly managing cash flow is a key indicator of success. If an institution has a healthy cash flow and a strategic understanding of how to change its cost structures when necessary, it puts operations in a much better position to support the organizational mission and increase the chances of success.
Enabling the Decision-Making Process With Data-Driven Storytelling
The real strength of conveying an engaging story through data is being able to tap into human emotions with your narrative. Through emotions, people can better process whatever information is being relayed, making the experience more memorable and influencing their attitudes, behaviors, and actions.
“The real strength of conveying an engaging story through data is being able to tap into human emotions with your narrative.”
This isn’t to say that an influential CFO, data-driven analytics, and a masterfully crafted tale will always inspire everyone on the team to act, but the combination provides valuable context behind the numbers.
It all goes back to answering the “why,” which is missing in traditional dashboards, but is key to show how the company can achieve its vision.
More importantly, storytelling with data also offers an opportunity to direct the team’s attention to key data points. Being a strategic CFO means cutting through all the data noise and highlighting relevant insights, thereby minimizing the potential for information overload. As most finance leaders know, the devil is in the details, and allowing team members to get caught up in the minutiae can quickly impede the decision-making process. Data-driven storytelling can circumvent all this.
Read more:
- Every Banking Brand Has a Story, But Marketers Must Tell Them Better
- Why Strategic Planning Often Falls Short (According to Pink Floyd)
6 Steps to Master the Art of Storytelling With Data
Understanding the need to tell a story with data and actually crafting a compelling narrative are two different things, and it often takes some practice to get it right. One thing is certain: It starts with a deep knowledge of the company’s strategy, as a CFO needs to map the narrative to the overall vision.
Keeping that in mind, attention can then turn to constructing an impactful data-driven story, starting with the following tips.
1. Find the story.
Storytelling with data is all about crafting a work of nonfiction. You must first uncover what exactly the data is telling you about the organization. Perhaps there’s a causal link within the data set that can serve as a launching point for the narrative and help bring audiences deeper into the story.
2. Consider your audience.
Though data can inform the direction of your story, how it’s told will depend on the makeup of your audience. Who will be hearing the narrative? What aspects will be most interesting and important? How technical or complex should the analysis be? If the story doesn’t resonate with your team or other stakeholders, it won’t provide the results you need.
3. Choose the right data.
So much data is available to you that it can be easy to become overwhelmed by the information. Where do you begin? That’s why the vision for the organization is so critical to crafting the story, as it can help you identify the data closely related to the topics you hope to explore in the narrative.
4. Uncover the most relevant insights.
Once you’ve narrowed down the data sets, you can proceed with analyzing the data. Delving deeper into correlations and patterns can help you uncover necessary insights — many of which could be unexpected — and arrive at a general theme for a data-driven story. You’ll also likely find a few subplots worth noting that can help support the overall narrative.
5. Offer context.
Data by itself isn’t all that compelling, especially from a storytelling perspective. How can you provide context for the insights you’ve unearthed? Don’t make the mistake of reserving context solely for the introduction of the story. You’re crafting a narrative, which means you need to frame the data in ways that are relatable to your audience. Pointing out certain correlations, patterns, and even anomalies can help provide better context and deepen understanding.
6. Create a structure.
All good stories follow a basic structure: introduction, rising action, climax, falling action, and resolution. Think of it as taking audiences on a rollercoaster ride, where tensions build and fall before arriving at that crucial moment of insight. With financial data, you may never have people on the edge of their seats, but leveraging a storytelling structure can help capture their attention and provide a familiar framework for processing the story you’re telling — or the story the data is telling.
Read more:
- Why Most Financial Institutions Flop When Using Stories for Marketing
- Storytelling with a Twist Powers Small-Business Connections for This Bank
Data-Driven Storytelling in Action
To put all this into practice, consider an example: A sustainability-focused fintech company might use data-driven storytelling to convey its mission, say around helping people measure the carbon footprint associated with their credit card purchases. The audience for this narrative would include potential investors, stakeholders, and policymakers interested in sustainable solutions.
The CFO could make the connection between consumers learning the “carbon cost” of the goods and services they buy and changing their purchase behavior to reduce emissions, then add context to how this consumer engagement appeals to the bank and credit union partners using the fintech’s services. The next step would be to show how this connects to profits and also benefits the environment.
The data could be framed to highlight global climate change challenges, introduce the company’s technology, present its data-driven insights, and then end with a call to action. This strategic approach would resonate with the fintech’s audience by aligning data with its vision and driving support for its eco-friendly business initiatives.
Storytelling with data isn’t always easy, even for a data-driven CFO. The volume of available data can make it difficult to understand where to start crafting a narrative. If you keep the company’s vision in mind, use this to uncover the story in the data, and remember the importance of context, you’ve got the makings of a compelling tale for audiences both inside and outside your organization.
About the author:
Alex Cedro is the senior finance executive at Tipalti, a payment automation software that helps businesses manage their entire supplier payments operations.