Financial Services Firms Are Lagging on Data Technology

Firms have made strides in the previous decade in terms of adopting self-service, web-based solutions—but the existing “fixed decision tree” approach is not sufficient for the next evolution in client service.

Mike Capone is the CEO of a company called Qlik, which provides “next-generation data analytics solutions” to a wide variety of clients, including U.S. and global financial services firms.

Capone gave an informative talk to open the second day of the DataDisrupt 2018 conference, entitled “the Rise of Augmented Analytics and Data Literacy in Financial Services,” and warned in stark terms that the financial services industry has broadly failed to take advantage of emerging big data technology.

“Financial services firms have made real strides in the previous decade in terms of adopting self-service, web-based client solutions,” Capone noted. “But I am here to warn you that the old fixed decision tree approach is not sufficient for the next evolution in client service that is already taking hold elsewhere in the economy.”

As Capone explained, many financial services firms (and others) have turned to business intelligence vendors to make sense of the data they hold, but too often even these providers rely on “outdated query-based analysis that restricts people to a linear exploration within just a partial and fixed view of that data.”

“As we see the world at Qlik, the next generation of business intelligence analytics coming to market are so much more fluid and open-ended in terms of what data you can plug in, and then how you can corral and control that data,” Capone said. “We call this the ‘associative data difference,’ and it is about allowing the data to speak to you in evolving and dynamic ways.”

Capone repeatedly stressed that financial services providers are not by any means ahead of the curve in terms of embracing the real power of big data.

“Trading professionals have embraced this next-generation thinking, but otherwise financial services data is still far too siloed and in a word, disrupted,” Capone said. “In that sense, now is the time to make a plan and make smart investments of time and resources in new capabilities. You will be able to better serve clients and be successful.”

According to Capone, empowered organizations are already at every point of their business using data to boost operational and strategic performance.

“That is the reality of the ongoing digital transformation of the economy, and there are going to be winners and losers,” he added. “I really believe that data is the foundation of the new economy, and that making new and profound data associations is what skilled and successful companies will do.  Companies that can be predictive and nimble will be empowered. They can shift and reimagine new ways of doing things. Especially in financial services, you have more opportunity than many other industries, I would say.”

Of course there are challenges to talk about as well, Capone said.

“First and foremost, people are not really data literate, either your staff or your clients,” he said. “Not everyone will become a data scientist, of course, but your people need to have the analytical ability to understand and leverage data. To this day, so many people are just so uncomfortable working directly with data. It will be a lasting challenge.”

Overall, Capone’s advice to financial services professionals and leaders is to consider making real investment in this area.

“The winners will be able to put the right data and the necessary skills into the hands of your people on the ground,” he concluded. “Both the leadership and those people who work directly with your customers—everyone needs to improve their data literacy.”