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Level Up Your Data Strategy: Understand Your Foundation

Data is a critical asset for banks and credit unions, capable of transforming customer engagement, streamlining operations, and driving growth. Yet, many financial institutions (FIs) aim too high without first building a solid data detection foundation. Without proper infrastructure, expertise, or clear goals, these efforts often fizzle out, leaving financial institutions disillusioned and progress stalled. 

In this blog, we launch a series to help FIs take realistic, actionable steps toward smarter data usage and improved decision-making. Our goal? Equip financial institutions with manageable strategies tailored to their current data maturity. 

Start with Your Foundation 

Data is the cornerstone of decision-making in financial services. When used effectively, it enhances interactions, optimizes resources, and reveals key performance drivers. However, significant barriers often prevent institutions from realizing these benefits: 

  • Disjointed Infrastructure: Data silos and lack of accessibility hinder insights. 
  • Limited Automation and Personalization: Basic marketing data analytics tools are underutilized. 
  • Skill Gaps: Data-handling tasks are assigned to individuals without proper expertise or training. 

Many FIs assume that banking experience translates into data proficiency. However, transforming your financial institution with data requires a unique set of skills and knowledge. Building a strong foundation involves understanding your current state and implementing practical steps for long-term success. 

Assessing and Understanding Your Foundation 

1. Identify Your Data Sources 

Banks and credit unions generate vast amounts of data, but many departments remain unaware of what’s available. A study by Boston Consulting Group (BCG) found that 70% of data transformation initiatives fail due to a lack of cross-departmental visibility into data sources. [1]   

  • Begin by inventorying all data sources across your organization. This includes data originating from core systems, marketing platforms (MDPs), and compliance tools. 
  • Collaborate with Finance and IT teams. Vendor management and expense records often reveal systems generating or storing data. 

2. Understand Who Has Access 

A 2023 study found that over 40% of FI employees report limited access to relevant data for decision-making. Often, the data exists but is siloed to specific departments or users. [2] 

  • Identify who can access specific data and assess whether they are trained to use it. 
  • Determine not only who has access, but who actively uses it. Many users may lack the expertise to engage data effectively, leading to misinterpretations and underutilization. 

3. Evaluate Data Formats 

According to PwC, 43% of organizations struggle with data consistency due to fragmented reporting formats. [3] Data stored in inconsistent formats—such as PDFs, Excel files, or proprietary systems—can be difficult to integrate and analyze. 

  • Establish standard formats for critical data types. By ensuring consistent formatting, your financial institution will be better prepared for future system integrations. 

4. Audit Existing Reports 

Redundancy in report generation wastes resources and creates confusion. Multiple teams may produce similar reports or ones that are no longer relevant. 

  • Conduct an audit of all reports to identify those that can be eliminated or updated. 
  • Focus initially on reports aligned to strategic goals and KPIs. 

 Institutions that streamline reporting processes see up to a 20% increase in operational efficiency. [4] 

Action Items to Start Today 

The objective is to improve data literacy incrementally. Start with these actionable steps: 

  • Foster Clarity and Transparency: Develop a baseline understanding of your financial institution's strategic goals and how data can support them. Discuss with senior leaders and review your strategic plan to establish a guiding framework. Gartner reports that organizations with clear data strategies are 1.7 times more likely to achieve business goals. [5] 
  • Define Data Accountability: Assign clear ownership for data access, reporting, and inventory. Clear accountability reduces conflicts and enhances efficiency. 
  • Optimize Access Control: Grant key individuals’ full access, along with the necessary training to work effectively with data. Strong data teams dedicate significant time to data-related tasks. 
  • Document Data Sources: Create a detailed inventory of where your data originates, how it flows, and how it is used. Documentation helps in future initiatives and process improvements. 

Building Alignment for Greater Impact 

Starting with a solid foundation not only yields immediate wins but also sets the stage for long-term success. By breaking down data silos, improving efficiency, and aligning efforts toward shared goals, your financial institution can unlock new opportunities. 

By taking these realistic first steps, your financial institution can move from disjointed data efforts to a cohesive, data-driven culture. 


Want more information and guidance on how to level up your data strategy? Register for our webinar. 

 

References 

  1. BCG. "Why Data Transformation Initiatives Fail." Available at: https://www.bcg.com. 
  2. Industry Report, 2023. "Data Accessibility Challenges in Financial Institutions." 
  3. PwC. "Data Consistency and Integration in Financial Services." Available at: https://www.pwc.com. 
  4. McKinsey & Company. "Driving Operational Efficiency with Data Alignment." Available at: https://www.mckinsey.com. 
  5. Gartner. "The Importance of Clear Data Strategies." Available at: https://www.gartner.com.