By Ephesoft

Financial services organisations have always understood that data is critical to success. Long before sophisticated IT existed, information was right at the heart of the sector. Details about an individual’s circumstances have always been essential in order to decide whether to lend them money, and just a few decades ago, hordes of analysts were employed to read through pages of paper reports in order to choose the right companies to invest in. Today, electronic data about markets, transactions and customers is available in abundance, but with it comes a new set of challenges. The question currently facing banks and insurers is how best to collect, store and manage this information while complying with privacy and money laundering regulations – and how to use it most effectively in order to benefit organisations, employees, and customers.

To find an answer, Ephesoft and the Financial Times gathered together a group of senior executives from financial services organisations at a FT Live seminar. FT moderator Alan Livsey chaired a panel which included Astrid Stange, COO of AXA; James Platt, COO of Aon; Kerem Tomak, Global Chief Analytics Officer of ING, and Ephesoft’s Senior VP Stephen Boals. The group discussed the data challenges that face the financial services sector and shared strategies to address them and was joined by a 500-strong audience of financial services professionals who contributed some of their own experiences via digital polls. 77 per cent of this audience stated they found it quite difficult to manage, analyse and use data in their own organisation. In this article, we outline some of the strategies discussed that are helping financial services organisations to tackle this problem.

Create a data culture

The panel was in agreement that managing data is no longer about a small group of elite analysts or engineers. All were of the opinion that a “data culture”, as described by Astrid Stange, COO of AXA, is essential. The goal for financial services organisations should be to motivate employees and customers to share information, meticulously maintain it and use it purposefully. As James Platt, the COO of Aon, stated, “We can only win the data challenge if the entire organisation follows a common strategy. Inadequate or incorrect information can be found in many places because an individual employee has not realised how important high-quality data is for the success of a company.”

Make it easy

Putting this into practice means that you have to make it easy for your teams to enter the data into your IT systems. The information you are receiving must be accurate, but it’s important to avoid restricting your capacity by over-complicating your data capture technology so that only a few specialised individuals can use it. As an example, information from customers will often arrive in a variety of different formats. A single insurance application may involve Excel files, PDF documents and emails, all of which have to be integrated into the insurance company’s systems in order to be assessed. It’s essential that you process these the right way. Having teams of people manually reading documents and typing in the details is one solution, but it’s inefficient, slow and prone to error. On the other hand, it is also inefficient to spend thousands of pounds to programme a computer system to read one particular document that will then need completely re-programming in order to read a different document.

Choose software you can configure, not re-code

For this reason, as Kerem Tomak, Global Chief Analytics office at ING, explained, a “low code” solution, which can be reconfigured, is a good option. For global organisations, even more variations will exist. “Every location has different local requirements for customer documents –a simple credit application in Germany needs entirely different documents from the same application in Italy.” The documents themselves can also vary. Legal documents, for example, often contain patterns of imagery or watermarking that are unique to a particular jurisdiction. This can make OCR very difficult to apply, so you need to take this into account if you’re considering automation.

Create structure where none exists

When it comes to analysing data to put it to work, a structure is essential. Information from every kind of document has to be stored in databases in order to assess risk or plan investments. Astrid Stange’s approach at AXA is to focus on standardisation. She recommends an internationally uniform architecture but acknowledges that this requires a great deal of work to achieve.

Stephen Boals of Ephesoft flagged up the additional challenge that 80 per cent of data in companies is currently “dark” – i.e., stored in a format that is not easily accessible, so a company may not even be aware that it exists. This applies particularly to the data that has been provided by customers but not introduced into a formal structure: “one application might have 100 other pieces of data in it that would be useful. How do you make it clean and available?”

Ultimately, every organisation has to strike a balance between capturing as much data as possible in a structured format and ensuring its overall quality. As James Platt concluded, “It’s not about perfection, but about creating a balance. A decision based on good, if not perfect, data, is still better than a decision without a data basis.”

Remember the customer experience

Companies in the financial services sector have a unique set of challenges. Astrid Stange commented that AXA often issues contracts that are between 50 and 100 pages long, which can be confusing not only for the company’s customers but also for its employees. For this reason, AXA is integrating essential contractual information into its customer IT systems so that service agents can access it easily.

The other factor facing all the traditional large financial services organisations is the need to compete with the new fintechs built with remote access in mind and offering their customers instant access to data regardless of their location and device. Bringing cloud technology to the forefront is now non-negotiable.

Getting everyone on the same side

The overarching conclusion from the webinar was that the concept of “data culture” is essential. Creating this is not easy, but with regular training throughout the organisation with a focus on the senior team it is an achievable goal. It is this partnership between employees and technology that will enable financial services organisations to reach their potential. Change management is critical to bringing employees together. As Astrid Stange concluded, “the efficient use of information depends on people.”