Financial services organisations have always understood that data is critical to success. Long before sophisticated IT existed, information was right at the heart from the sector. Information regarding an individual's circumstances will always be essential in order to decide whether or not to lend them money, and merely several decades ago, hordes of analysts were employed to read through pages of paper reports in order to choose the best companies to purchase. Today, electronic data about markets, transactions and customers is available in abundance, but with it comes down a new set of challenges. The issue currently facing banks and insurers is when better to collect, store and manage these details while adhering to privacy and money laundering regulations – and how to use it most effectively to be able to benefit organisations, employees, and customers.
To find an answer, Ephesoft and also the Financial Times gathered together several senior executives from financial services organisations at a FT Live seminar. FT moderator Alan Livsey chaired a panel including 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 information challenges that face the financial services sector and shared strategies to address them and was joined by a 500-strong audience of monetary services professionals who contributed a few of their own experiences via digital polls. 77 per cent of this audience stated they found it quite difficult to handle, analyse and employ data in their own individual organisation. In the following paragraphs, we outline a few of the strategies discussed which are helping financial services organisations to tackle this problem.
Create an information culture
The panel was at agreement that managing information is no longer in regards to a small group of elite analysts or engineers. All were of the opinion that the “data culture”, as described by Astrid Stange, COO of AXA, is essential. The aim for financial services organisations should be to motivate employees and people to share information, meticulously maintain it and use it purposefully. As James Platt, the COO of Aon, stated, “We are only able to win the information challenge if the entire organisation follows a typical strategy. Inadequate or incorrect information are available in many places because a person employee hasn't realised how important high-quality information is for that success of the company.”
Make it easy
Putting this into practice implies that you have to make it easy for the teams to enter the information to your IT systems. The information you are receiving must be accurate, but it's vital that you avoid restricting your capacity by over-complicating your computer data capture technology so that just a few specialised individuals may 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 is important that you simply process these the right way. Having groups of people manually reading documents and keying in the facts is a solution, but it is inefficient, slow and vulnerable to error. On the other hand, it is also inefficient to spend a lot of money to programme a computer system to see one particular document that will then need completely re-programming to be able to read another document.
Choose software you are able to configure, not re-code
For this reason, as Kerem Tomak, Global Chief Analytics office at ING, explained, a “low code” solution, which may be reconfigured, is a great 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 may also vary. Legal documents, for example, often contain patterns of imagery or watermarking that are unique to particular jurisdiction. This can make OCR very difficult to apply, which means you need to take this into consideration if you're considering automation.
Create structure where none exists
When it comes to analysing data to place it to work, a structure is essential. Information from every kind of document has to be kept in databases to be able to assess risk or plan investments. Astrid Stange's approach at AXA is to concentrate on standardisation. She recommends an internationally uniform architecture but acknowledges this requires a lot of work to achieve.
Stephen Boals of Ephesoft flagged in the additional challenge that 80 percent of information in companies is currently “dark” – i.e., kept in a format that is not readily available, so a business may not be also conscious that it exists. This is applicable particularly to the data that has been provided by customers although not introduced right into a formal structure: “one application may have 100 other bits of data in it that would be useful. How do you make it neat and available?”
Ultimately, every organisation has to strike an account balance between capturing just as much data as you possibly can in a structured format and ensuring its overall quality. As James Platt concluded, “It's not about perfection, but about producing an account balance. A choice based on good, otherwise perfect, data, is still much better than a decision without a data basis.”
Remember the client experience
Companies in the financial services sector have a unique group of challenges. Astrid Stange commented that AXA often issues contracts which are between 50 and 100 pages long, which may be confusing not only for that company's customers but also for its employees. Because of this, 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 may be the have to contend with the new fintechs built with remote access in your mind and offering their clients immediate access to data regardless of their location and device. Bringing cloud technology towards the forefront has become non-negotiable.
Getting everyone on the same side