Data Analytics - An FS perspective
Despite major effort in the area of data analytics many financial institutions still struggle with data related problems writes PwC’s Keith Power. He looks at the persistent issues and how to successfully address them.
Previously financial institutions faced the challenge of bridging the gap between regulatory demands for data and the shortfalls in data arising from challenges with in legacy systems. However, the landscape is changing rapidly and this brings with it new challenges.
Keith Power
Keith Power


On a personal level, we will all be familiar with the data captured via a smartphone - every time you take a walk your phone captures a wealth of information about the number of steps, speed, location, etc, and reports it back in a useful graphical form which allows intuitive analysis. Personalised direct marketing based on spending (and increasingly on browsing) patterns have been utilised by retailers for many years. Data buzzwords such as big data, predictive analytics, business intelligence and data scientist pervade the everyday vocabulary.

These are all symptoms of an increasing appreciation and, more importantly, an increasing expectation, of the ‘art of the possible’ when it comes to data and data analytics. This increased level of expectation is pervasive and includes many stakeholders such as regulators, customers and staff. This has transformed the smart and appropriate deployment of data analytics from a nice-to-have aspiration to a critical component of success for organisations who want to be competitive in the marketplace and efficiently maintain regulatory compliance.

Take a look inside most financial institutions in Ireland today and you will invariably find lots of data and lots of people busily working away on recording it, storing it and protecting it. Increasingly, you will find people cleansing the data, occasionally analysing it, and sometimes even making a decision based on it. However, despite all of this activity and effort, we continue to see financial institutions struggle with data related problems such as:

• Difficulty in meeting regulatory demands for complete and accurate data;
• Few key decisions are based purely on solid data;
• Continuous monitoring and predictive analytics, despite being spoken about for over a decade, remain inconsistent and limited at best in their application; and
• For many organisations, a clear single customer view embedded into everyday operations remains an aspiration.

The root causes are not difficult to identify. Poor data quality, multiple legacy systems, business units wedded to historic decision patterns, series of uncoordinated tactical projects to deal with individual regulatory demands and limited resources can all challenge an organisation’s ability to capitalise on the potential of data analytics.

The key to successfully addressing this challenge lies in the principles of enterprise-wide coordinated effort and embedding the use of data analytics in the key processes throughout the organisation. This principle applies whether data analytics is compliance focused or a marketplace enabler. In a financial services context this means following a few key steps including:

• Establishing a solid base of data quality which is monitored, maintained and can be evidenced;
• Identifying specific opportunities to embed data analytics within the critical path of business processes;
• Deploying tactical data analytics to support compliance efforts, for example early warning analytics to combat conduct risk;
• Upskilling staff to facilitate the development of solutions which can be re-used for ongoing analytics and decision making; and
• Addressing cultural change to make data and analytics enablers within the organisation.

By adopting such an approach, financial institutions can ensure that they can rise to the challenge being set by customer expectations and ensure they have the agility to address the continued regulatory demands into the future.
Keith Power is a director at PwC Advisory.
This article appeared in the June 2015 edition.