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Yet most have encountered obstacles on their way to data-driven reinvention. While many have developed pockets of data and analytics excellence, they struggle to scale deployments, integrate data-driven decision making into day-to-day operations, and use the data to drive a business. truly transformative change across the company. In fact, an average return on investment of 61% is achieved by banks which have made further progress in terms of data maturity.
“Commercial banks have a wealth of data to fuel better decision making, empower relationship managers, automate processes and add value for their customers. “
Yet much of the rich real-time transactional data banks have access to is lying fallow.
In search of exponential returns
Unlocking the value of data and putting knowledge in the right hands across the enterprise will allow commercial banks to compete more effectively with their new age rivals, including fintechs, bigtechs and neobanks. The leaders of tomorrow know that the time for experimentation, proof of concept and siled deployments is over. They seek to move from incremental change to exponential improvement.
Commercial banks have a wealth of data to fuel better decision-making, empower relationship managers, automate processes and add value for their clients. Yet despite significant investments in using data and AI to improve sales, productivity, and performance, most are only seeing incremental returns.
Obstacles to Growth
The focus on pilots and small-scale projects means that many commercial banks are focusing their data-driven transformation efforts on incrementally improving existing business models and processes. The focus tends to stay on mitigating immediate problems rather than on disruptive innovations that could generate exponential returns.
In addition, after years of investing in building a digital foundation, banks and their employees are tired of technological change. Building that base and getting the bank out of technical debt is a huge effort, and the prospect of adopting another complex computer program can become daunting.
Overcoming these hurdles starts with understanding that data-driven reinvention isn’t a departmental or technology project – it’s a company-wide effort that takes leadership from above.
A common element of data-driven leaders in different industries is prioritizing data on the C-suite agenda, with leaders encouraging knowledge sharing, data-driven decision-making, and appropriate risk-taking.
Data leaders see these capabilities not only as a competitive differentiator, but as a way to drive ROI. investment.
Stimulate growth
The new data offers a tremendous opportunity to uncover hidden signals and stimulate the growth of commercial banking.
The challenge? In a complex and rapidly changing digital and data ecosystem, it can be difficult to put data in the hands of the right people when they need it.
Incorporating in-depth knowledge into the day-to-day working methods of a relationship manager will improve efficiency and productivity and deepen relationships. Banks need multi-level segmentation, customer lifetime value, and behavioral insights to maintain and grow their existing portfolio, as well as manage risk.
As a bank moves up the data maturity curve, it can use analytics to solve more complex problems and deploy AI to drive higher levels of automation.
Amplify results
Banks that want to make data a real competitive advantage seek to align their data strategy with their business strategy.
This industry vision will be led from above with a roadmap for:
- Master the basics: use data and AI to monetize core business strategies.
- Partner to grow: create ecosystem partnerships to deliver a broader end-to-end customer experience.
- Shaping new business models: leverage data as a competitive differentiator to enable entirely new businesses.
As a first step, banks will assess the ability of their platform to support their overall data strategy and accelerate their efforts to catch up on technical debt of digital, AI and data assets. But they’ll also keep an eye on scaling their deployments and developing an agile, data-driven culture across the enterprise.
Those who succeed will stand out in an increasingly contested commercial banking landscape.
Chris Jaggard is Head of Commercial Banking Services at Accenture Australia and New Zealand
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