Two years after the first COVID-19 lockdown that forced the financial services industry to go digital, you might think digital processes would be a piece of cake. However, a concerning number of insurers and banks still struggle with data management, according to Quantexa, a global data and analytics software company.
Quantexa's “Data in Context” report, which included insights from in-depth interviews with 50 decision-makers at Australian insurers and banks, found that 95% of Australia's insurance and banking industries still suffer from a data decision gap – the inability to bring together the internal and external data to make accurate and trusted decisions as enterprises look to bounce back from the pandemic.
Moreover, only 16% of insurers and banks have a data-centric culture to drive strategic decisions to improve business value, and only 10% have a rich, single view over their data to support operational decision-making.
As insurers and bankers continue to struggle with data management, the report warned that the data decision gap might result in:
“Many [Australian insurance providers and banks] struggle with interpreting, analysing, and leveraging that data to drive high-quality strategic decisions. This fosters a data decision gap and stands in the way of establishing a single view of their customers,” said Shaun Mathieson, regional vice president of Asia-Pacific (APAC) at Quantexa.
“Without complete and contextualised data, it's almost impossible for banks and insurers to deliver personalised services to their customers or to accurately address fraud, financial crime, and other categories of risk.”
When asked about the challenges standing in the way of building a strong data management foundation, 54% of the respondents cited access to necessary technology infrastructure (spanning both on-premises and cloud). At the same time, 44% referenced the inflexibility of enterprise data models, especially for complex data and relationships.
However, when asked about ways to enhance decision-making within their organisations, 56% of the respondents pointed to driving improvements in master data quality, 52% to implementing a scalable data foundation for analytical and operational use, and 50% to creating a shared data platform.
“Becoming data-driven is increasingly front of mind for banks and insurers, and this is fuelling increased investment into addressing the data decision gap at varying levels,” Mathieson said.
“Alongside building scalable tech foundations and investing in the right skills, companies are moving to Contextual Decision Intelligence (CDI), which evolves traditional approaches to data by connecting every datapoint within an organisation, as well as external data sources.”
