While data management may be a key component of business function for buy-side financial institution executives, roughly three-quarters of them say that they find it difficult making decisions when it comes to dealing with data and analytics, according to a new report.
The study, which was performed by an internationally recognized tax and advisory services firm, queried approximately 150 chief financial officers and chief information officers from around the world, who worked for companies that earned revenues in excess of $1 billion on an annual basis. It revealed that 75 percent of respondents admitted to having trouble making a determination on what to do with data and analytics.
Effective data management was seen as a key component to successful business operation in 99 percent of cases, the analysis revealed.
“We live in an increasingly data-driven world where D&A has the potential to revolutionize the way we conduct and manage business operations across the entire enterprise,” said Mark Toon, CEO of the organization, which has offices in 155 different countries, originating in Switzerland. “From CEOs, to CFOs, CIOs and CMOs, the challenge for today’s executive is understanding how to draw actionable insights from data and turn them into tangible, genuine results.”
Data technology integration biggest challenge, executives say
In addition, the report revealed that nearly seven in 10 executives considered D&A to be a key component to their being able to grow as a company, and more than 55 percent said that they had changed their strategy in prior years in order to acclimate to the demands that big data engenders. Additionally, just over 40 percent said that of all the challenges, their biggest one was integrating data technology into their existing business models or systems.
A key component to effective data management is developing sound data governance practices. However, many financial firms have programs in place that aren’t sufficient. Based on a recent analysis performed by an investment management consultancy firm, most of the organizations looked at had a level two maturity. An “optimized” state was level five, while having fragmented data management meant that a company was at level one.
If financial firms are going to be effective in their handling of data, they need to ensure that their practices are optimized. Those that do reap the rewards, illustrated through improved operational efficiency, better cost controls, client servicing and compliance.