The focus of most digital banking transformation efforts is to squeeze the best out of available data and insights for the benefit of the customer and organization alike. The challenge is that the access to these insights is fragmented and there is massive friction in the ability to deploy solutions. In fact, a majority of financial institutions globally rank accessing data and insights from multiple sources as one of the top three challenges to implementing their AI strategy.
One strategy that an increasing number of financial institutions are working towards is the democratization of data and access to insights. Data democratization provides access to data across a wider array of internal users, regardless of their role or level within the company. This allows for better and faster decision-making and improved strategic planning. For most financial institutions, the sharing of data and insights can help improve business operations, customer experience, marketing communication, and risk and fraud mitigation.
Benefits of Data Democratization
One of the most important benefits of data democratization is the broadening of the access to data and insights, resulting in less need for decision makers to rely on a finite group of individuals or departments to control access to the data, helping to eliminate biases and greatly increasing the speed of decisions, leading to better business outcomes.
Also, when customer-facing teams gain access to customer behavior and preference data and insights, they can create personalized and relevant experiences faster and at a scale previously impossible to achieve. This can increase customer satisfaction, engagement and loyalty. Data democratization can help staff target digital and human marketing messages, produce predictive product recommendations, and assist in providing highly contextual service interactions. Alternatively, if teams across the organization have access to customer feedback and complaints, they can quickly address issues and create new processes and solutions that will enhance loyalty and retention.
Data Can Bolster Staff Ingenuity:
Data democratization can often result in increased innovation. When more banking organization staffers have access to data and insights, they are more likely to come up with new and creative ways to serve customers.
This can eventually lead to the development of new products, services and business models that can drive growth and competitiveness.
Finally, data democratization can lead to improved efficiency, cost savings and compliance. By giving an increased number of employees access to the data and insights, team members can make better use of their time and resources. This can speed decision making, produce more accurate forecasting, and reduce the need for manual processes. This can help banks and credit unions to comply with such regulations such as Know Your Customer and anti-money laundering compliance.
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Barriers to Data Democratization
Despite the significant benefits of data democratization, implementing such policies and practices remains a major challenge. A key issue is ensuring that the data is accurate, complete and current. This can be difficult for many banks and credit unions when data is stored in multiple systems, or when different teams use different data sources. Data silos can also lead to inconsistencies in data consistency, quality and completeness.
To help in resolving these challenges, organizations must create a centralized data repository that is easily accessible to all members of the organization. In addition, banks and credit unions must implement data governance policies that ensure that data is accurate, complete and up-to-date. Organizations should also invest in data visualization and analytics tools that make it easy for users to access, analyze and deploy solutions based on the data.
To support a more overarching data culture, banks and credit unions should provide data literacy training and support for all members of the organization regarding the access and deployment of data and insights. This will ensure that they are able to use the data effectively and make the most of the insights it provides.
As can be imagined, there must be trust in the quality of data and security associated with the sharing of data across the organization. Ensuring that the data is protected from unauthorized access, breaches or misuse is crucial.
The Future of Data Democratization
The importance of data and insights for the ultimate success of any financial institution can’t be questioned. Data and insights can be used to drive efficiency, customer value, trust and competitiveness. This data and insight must be accessible and usable by all members of an organization in order to realize its full potential in a digital banking future.
As the amount of data available continues to grow, the importance of extracting meaningful insights and make informed decisions becomes a competitive differentiator. When all members of an organization have access to and use the data, better business decisions are made, improving the speed and quality of outcomes.
Ultimately, consumers will be more informed about their data and have the ultimate control on who accesses their data at what frequency. In this future, legacy “owners” of customer’s data (financial institutions, tech companies, retailers, etc.), will become gatekeepers under the supervision of consumers themselves. As needs to be done within financial institutions, protocols will need to be created and followed to make data understandable to end-users and to minimize any risk of misinterpretations or use.