Other parts of this series:
Navigating the Transformation to Sustainable Growth
As financial services customer expectations shift toward an improved digital experience that aligns with other experiences in their daily lives, companies are compelled to take a strategic approach toward transformation. By meeting these customer expectations, companies are better positioned to unlock the value of cloud services―from data-driven insights to customer retention.
As I explained in my previous post, our thinking around Journey Within the Cloud identifies three steps that could help financial services organizations enhance their data management capabilities for driving sustainable growth. While each organization is unique, there are common issues that can be addressed to the benefit of every organization.
Step #1: Create a Holistic Cloud Data Strategy
A collaborative, holistic cloud data strategy should include input from both business and technology stakeholders. By working together to identify challenges and set achievable goals, stakeholders can develop a strategy and governance model that meets business needs today and tomorrow.
- Identify Key Drivers: The conversation should start with the key drivers for migrating data to the cloud. This should include the platforms and systems the company expects to use to store and interact with its data. Breaking down departmental data silos and creating more flexibility through third-party services can help reduce time-to-market and make it easier to interact with data across the enterprise.
- Establish Governance: The governance team should be established at the outset and include internal security and risk specialists. Having a strong governance team in place early on can help support an operating model tailored for cloud data, and that addresses platform security, regulatory compliance, and flexibility. The strategy should also include governance processes regarding external collaborators, such as fintechs and other software providers.
- Embrace Innovation: Open innovation should be a key part of a holistic cloud data strategy. Innovation centers typically use a lab-type environment, which not only promotes creativity within the organization but outside of it as well by allowing for external collaboration and engagement with third-party vendors and alliances without granting full access to data.
Step #2: Migrate and Structure Data
Once the appropriate infrastructure and strategy are in place and the stakeholder team has been built, you can begin to tackle technology and data challenges to help unlock analytical capabilities in the cloud.
- Build Appropriate Infrastructure: A flexible cloud infrastructure allows companies to scale up and down depending on business needs, without worrying about increasing or over-purchasing physical infrastructure. Such an infrastructure should also accommodate microsystems and open application program interfaces (APIs) that allow collaborators to integrate quickly and easily while still adhering to proper security, privacy, and compliance measures.
- Assess Scope of Migration: Not all data should be moved. Some may be outdated, unusable, or very sensitive. Some data is best kept on premises or deleted entirely. Understanding the legal, corporate, and ethical responsibility associated with holding the data is critical. Local and global regulation—such as the General Data Protection Regulation (GDPR)—as well as customer and market sentiment should inform the type of data you choose to retain and how you use this data.
80% of consumers are comfortable with their data being retained so long as the company is transparent with how it uses the data and provides them with control over data.
- Migrate Data to the Cloud: Eliminating organizational data silos is one of the first steps in developing the flexibility needed to reduce time-to-market and create a more personalized experience for consumers. Many cloud companies and affiliates offer services to make this process easier, including data management and transportation, or this process can be managed in-house, if the proper skills are available.
- Clean and Structure Data: For years, data has been collected without a standard for identifying and labelling it across enterprise or industry, making it difficult to create an interconnected system. Purposefully structuring and tagging data at the customer level can turn seemingly irrelevant or disconnected information into a clear map to actionable insights.
Step #3: Identifying Key Skills and Tools
Your final step is to make sure you have the resources for an effective transformation.
- Fill the Gaps. Proper skill sets allow workers to innovate and apply the power of cloud. Technology and analytics-related skill gaps should be identified and filled.
- Leverage External Resources: Experienced data scientists can be challenging to recruit, especially when competing against the draw of Silicone Valley tech companies. Thus, teams may have to consider collaborating with consultants or contractors as an alternative. These workers should have the proven capacity to gather, govern, and translate data into insights, as well as manage the systems and their connection points while adhering to regulatory and privacy standards. When considering advanced analytics tools, financial services companies should consider integrating directly with emerging technology companies and fintechs via open APIs. These emerging companies are typically better equipped to develop disruptive technologies or business models, as they face fewer barriers such as legacy systems, processes, and governance. These factors allow them to be more agile and adaptive.
- Engage Cutting-edge Technologies: Companies that properly prepare for and are willing to integrate with leading data analytics tools that use machine learning and artificial intelligence have a significant advantage in executing a holistic transformation strategy. The combination of the technology to analyze the data and the human skills to turn the analysis into product, customer, and operational insights can be invaluable in piloting and driving new business models.
Creating Desired Outcomes
Digital transformation that leverages the cloud is becoming a critical strategic imperative. Following these three steps can help get your firm solidly on its way to sustainable growth and desired outcomes.
To find out more on how to improve your data management capabilities and function using cloud, please contact me.