Banks and insurance companies are reorganizing data management
providers on the subject
A current study from Lünendonk sheds light on the path to the “Data Driven Enterprise”. It shows that banks and insurance companies are currently reorganizing their data management. The focus is on customer centricity, decision making, and regulatory requirements.
For the study “From Data Silos to Data Flows: The Shift from Banks and Insurance Companies to Data-Driven Enterprises,” 32 expert interviews were conducted with executives from IT, finance, and other bank departments and medium and large insurance companies. It was created in technical cooperation with KPMG.
It shows that banks and insurance companies are transitioning to data-driven businesses. They want to improve their corporate management and act more customer-centric through better and faster decisions. Compliance with the increasing regulatory requirements in the banking and insurance sector is also an important issue. Therefore, more than 70 percent of respondents want to set up a data management platform to create a consistent database.
Strong focus on regulation
Financial institutions are particularly concerned about the implementation of regulatory requirements. 91 percent use their data primarily for this purpose. “Although this high proportion was to be expected, it shows very clearly that in almost all banks and insurance companies, corporate resources are still largely tied up in dealing with supervisory requirements. However, this also means that scarce analytical resources are not available for topics related to digital transformation”, explains Mario Zillmann, partner at Lünendonk & Hossenfelder and author of the study.
“The trend will continue to develop in the direction of not only passing fixed result data, but also basic data on a large scale to supervisory authorities,” adds Fanny Luthmann, partner at KPMG. Therefore, full transparency, high data quality and your own analysis skills are essential. This area of tension also creates great pressure to reorganize the reporting system and transform it into a data-driven enterprise. Nine out of ten participants expect this to lead to better and faster decisions and greater process efficiency. 84 percent expect cost savings.
The architecture and data storage must adapt to the new circumstances. According to the study, data lakes will be used more and more in the future. 71 percent of respondents want to rely on hybrid data lake and data warehouse constructs. The situation is similar when it comes to cloud usage: here too, 71 percent want to rely on a hybrid IT infrastructure made up of on-premises and cloud solutions.
Study participants see a need to catch up when it comes to data quality. A good half (55 percent) rate the current quality of their data as mediocre at best. Only three percent rate it very high. “The main causes of this are a lack of knowledge and understanding of data, which leads to a poor data culture. Similarly, inconsistent and incomplete data records, lack of governance and accountability in data management, and poor interoperability of IT systems all lead to poor data quality,” says Zillmann.