Financial services firms are collecting prodigious and diverse amounts of consumer data — both structured and unstructured — to deepen relationships, create exceptional experiences, further establish financial health and well-being, and build trust.
Market activity creating even more data
Decades of commercial mergers and acquisitions, core platform replacements and integrations, and workforce transformation programs have generated mountains of consumer data in every enterprise. While this new ecosystem of consumer data creates business opportunities for financial institutions, many firms candidly admit challenges associated with data governance along with proper risk and security controls. These variables have made it difficult for companies to address the underlying data integrity issue. This creates a massive risk to realizing the benefits of new technologies and connected data ecosystems such as cloud, unstructured data platforms and analytical environments.
Additionally, there is no doubt that legacy systems create complex issues. But there are new ways to tackle managing consumer data. The key for financial service companies is to gain executive commitment and investment. Data privacy leaders also need to challenge executives who hope for an easy answer, especially those who wish that the problem will simply fade. Nothing is more valuable to a financial institution than its customers and the trust those customers place with the institution to protect their data.
Where do we go from here?
Faced with a tsunami of consumer data-related regulation, financial institutions find themselves at a critical inflection point. To continue to grow, companies will need to use customer data. Yet to safeguard their reputation and foster trust with customers, organizations must institute robust governance and internal safeguards to protect data privacy. Cleaning up customer data is not easy because it sits not only in the most obvious spots but also in unstructured data environments that may lack transparency and traceability — complicated further by extended partnerships, vendors and alliances — potentially unattended and, in many cases, without sufficient visibility to the board and C-suite.
In the future, customers will expect more control over their data and will want the option to “opt in” to hyper personalization. They will expect that firms won’t use their data without permission; therefore, all of these considerations must be elements of governance.
Summary
Data privacy isn’t just about regulation or enabling technology; it is first and foremost an obligation. It is the most fundamental promise businesses can make to their customers — the uncompromising protection of their personal information. Financial institutions that are able to design, implement and adapt privacy safeguards, while using available customer data to deliver richer and more evolved experiences, will be the biggest winners of all.
