FS leaders face a crisis of confidence over business-critical decision-making

By Andrew Stephenson, Director of Marketing EMEA at Treasure Data

The financial services (FS) sector has faced a great deal of uncertainty since the pandemic began over two years ago; from increased risk of cyber attacks and fraud caused by the rapid acceleration of digital banking, to the disruptive force of open banking start-ups, and the increased need for comprehensive customer support channels. It’s clear that not only has the sector faced challenging business-critical circumstances, but that the conditions surrounding those decisions have changed irreversibly.

Earlier this year, we explored the views of the C-Suite, across multiple sectors, to understand the processes behind the art of decision-making, and the results were stark: decision paralysis is rife post-pandemic, with CEOs feeling FOMU (fear of messing up) more than ever before.

For the financial services sector, this was particularly true. More than half (54%) of FS leaders now feel less confident making business-critical decisions compared to before the pandemic, and six in 10 (62%) revealed that they were afraid of making the wrong decisions. In addition, 58% admitted to feeling more pressure on the decisions being made.

Not only is there a clear crisis of confidence when it comes to making decisions, but the sector appears to be ‘flying blind’ without proper insights and data intelligence on its customers and clients.

Yet, the financial services sector has access to more data than ever before, in part due to the seismic shift to online. And therefore it’s not surprising that 72% of FS leaders say they base more of their decisions on data now than a couple of years ago, and 68% say that the pandemic has highlighted the importance of data when it comes to decision making.

But what is most concerning, is that while this may be true – FS leaders do not necessarily feel they understand how to fully capitalise on this new and improved data landscape. Over half (52%) believe that they don’t have the right tools in place to interpret and use data to make informed decisions, and one in two (49%) don’t feel confident interpreting and using data to make informed decisions.

As high street banks such as HSBC and Lloyds Banking Group continue to close branches in favour of online, and the cost of living soars for businesses and consumers alike; the C-suite is truly leading during an era of unpredictability. Implementing successful data-driven strategies that enable action and precision has never been more important, and all FS leaders must consider the following three areas to ensure they are data-ready.

1. Eliminate data silos

77% of FS leaders agree that good quality data empowers them and their businesses to create a competitive advantage when used effectively, yet many are currently relying on siloed data which is restricting their ability to make the right decisions for their organisations. As the digital environment becomes ever more interconnected, businesses risk missing out on critical intelligence about their customers and operations as a result.

Accessing the highest quality cloud-based data, and having the tools and skills to use it, is therefore imperative if FS leaders are to overcome the crisis of decision-making currently in their midst and move out of the dark. In fact, we found that 74% of FS leaders stated that they were sometimes forced to make business critical decisions without adequate data and information.

Only through effective channels of communication, with access to all available data, can financial services businesses develop the holistic view of their customers and clients needed to provide high-quality service in this continuing time of unpredictability.

2. Invest in upskilling your team

In order for financial services leaders to obtain a holistic view of data available, financial services organisations must first invest in boosting their skills. Our research found data literacy is a concern for FS leaders, with 60% saying they felt that a better understanding of the available data would help them perform their job more effectively.

Upskilling your team will unlock their ability to turn unconnected data points into a full picture of actionable insights. Once leaders and those working beneath them learn how to identify which data is genuinely useful and how to connect insights across channels and platforms, a picture starts to form, revealing invaluable patterns of customer behaviour and consumer preferences.

Equally, proper training can ensure you and your team know exactly how to conduct data management responsibly and ensure the right decisions are made around consumer privacy. With the right teaching and tools, leaders and those around them will feel empowered to deliver tailored, personalised experiences without compromising privacy.

3. Divide and conquer by establishing actionable insights

Taking a holistic view is important – however, large data sets lose value without the intelligence and expertise needed to turn them into insights. Our research showed that the real problem facing FS leaders is not that there is too much data, but instead that there is too little intelligence. In the age of precision marketing, data must be mined and transformed into actionable insights in order to inform the most effective communications with customers and clients.

The C-suite must recognise that they have access to a treasure trove of intelligence, however, deciphering this requires the right expertise and organisational setup to translate these goldmines into actionable insights. By being surrounded by the right skills and the best data setup, FS leaders will become more agile and confident in navigating such an uncertain landscape, and their decision-making will be driven by smarter insights. This will prove to be crucial to financial services organisations maintaining their competitive advantage, keeping on top of what is a volatile external environment.