The industry is investing more to try to understand the vast amount of information it collects
The financial services and insurance industries are among the best placed to understand their customers due to the vast amount of data they amass.
But without the technology and talent needed to collate it into meaningful results, the industry is failing to realize a goldmine of customer information that could further their respective businesses.
That’s the conclusion of a global study conducted by Aite Group for TransUnion which has found that 75% of financial services and insurance executives admit that the fragmented nature of their data pools is a challenge. Many struggle to create the rich analytics that would really benefit their business.
This rises to 82% among Canadian respondents.
However, the industry is recognizing the dual importance of investment in technology and talent to address the data-mining gap.
Artificial intelligence/machine learning (AI/ML) is driving a key focus for analytic technology with 3 in 4 executives globally planning to integrate the tech into their platforms in the next 24 months.
For Canadian executives this figure drops to 58% but likely due to strong adoption already with only 7% of Canadian respondents stating that they currently have no AI/ML analytical models, half the global average and a third of the US figure.
“Businesses are re-evaluating their technology investments, and looking to implement artificial intelligence, machine learning and alternative data models and sources,” said Gene Volchek, senior vice president of global data science and analytics at TransUnion. “Their end game is to gain deeper analytics and competitive insights that better allow them to mitigate risk and meet consumer needs. Ultimately, the companies that best leverage these data and analytical technologies will provide consumers with the best experiences, resulting in more revenue.”
Finding talent
As well as technology, firms are seeking the right talent to make good use of the data they collect.
But they are challenged by talent shortages along with inflexible legacy technology and regulatory barriers.
“Most financial institutions lack a single, cohesive analytics platform,” said Tiffani Montez, senior analyst at Aite Group. “Firms may have vastly different data repositories and teams managing analytics functions, often leading to multiple approaches – by line of business, role and channel – across their institutions. To address these issues, many financial institutions are looking to centralize their data into a single platform that can quickly support change and integrate new data models.”
The report says that it is crucial for firms to streamline their processes and have closer alignment between the technical tools that are readily available and talent with specialized knowledge of turning data into insights.
Increased budgets
The survey found that across all regions, 78% of marketing executives and 70% of risk executives expect their overall budget to increase year-over-year, for data analytics /big data and analytics/data science tools for each role, respectively.
“Integrating data from across a consumer’s credit journey provides a rich canvas for drawing insights, however it is clear that financial and insurance industries are struggling to manage and extract the right information without access to the proper analytical tools or having people with the right skillset. Those companies that put in the investment will also most likely develop the top solutions that make them more competitive in today’s consumer-driven market,” concluded Volchek
