Data is a valuable currency to organizations that are looking to accelerate their business, gain a competitive edge, and build value adds products for their customers. But with the rise in smartphones and ease of accessibility to the internet, a large volume of data is generated that is scattered and unstructured. In today’s data-driven world, meaningful data insights play a crucial role in decision making. In the face of Digitalisation (also, Digital transformation), data collaboration is of utmost importance.
Right now most organizations have centralized back-end analytics teams that run the data analysis once in a while and identifies actionable outcomes based on its own judgement. Instead, imagine a world wherein these backend analytics teams become enablers rather than controllers and the end-user directly access analytics on a real-time basis. Data democratization can provide the much-needed barrier-free access to data.
Data democratization is in fact the first step towards Digitalisation. It mandates that data be accessible and understandable to end-users (internal and external) to be able to make data-driven decisions. The goal is to avail data at any time, with no barriers/gatekeepers to access or understand data. Traditionally, the banking sector has operated under data silos. Data is owned by disparate business units, divided by distinct lines of applications, geography, data stores, and hierarchy. With data democratization, customizable analytical tools are deployed to desegregate and connect siloed data. The benefits of data democratization, among many, is in delivering better operational efficiency, business intelligence (BI), fraud detection, financial reporting, discovering customer profiles, record keeping, and customer experience.
Democratization of data across an organization opens up new opportunities that simply wouldn’t be possible with traditional BI tools. For instance, the Royal Bank of Scotland moved to data democratization to sort their digital marketing initiatives. Data existed in siloes of call centers, human resources, and legal department. The IT teams realized the need for data democratization and providing non-marketers access to unified data. By analyzing and understanding the data, non-marketers were able to provide new insights into the marketing process and optimize the customer’s experience.
More and more banks are slowly realizing the need for a collaborative approach toward data and its availability to all users across the organization. Distributing information across teams and business units would empower individuals at all levels of hierarchy and responsibility to use the data for better decision making.
But of course, while data democratization is considered to be the latest industry game-changing buzz word by many, there are always common excuses and some genuine fear about data Integrity and data Anarchy that are used to avoid Data Democratization.
- In a highly regulated Banking industry, data security and compliance are the priority. This user-centric architecture with open access to data is a security concern for organizations.
- Traditionally, data analysis and insights are governed by data scientists or analysts. Data democratization raises the issue of data misinterpretation by non-skilled professionals.
- There are technological and organizational barriers to realizing the full potential of open data in the banking sector, including the inability of banking systems to provide standardized information.
- Data sources can vary and providing open access to several users brings up the issues of data ownership, often pitting users against technology.
- To drive better insights and compliance requires replacing legacy systems with modern platforms and expansive data storage facilities — an expensive affair for smaller financial institutions.
Despite the concerns, data democratization is an essential part of digitally-aware organizations. Strict governance over the collection, interpretation, and dissemination of information would help address accountability and form a center of excellence. There are several ways an organization can guarantee success in a Data Democratization initiative and provide the Right-data-for-each-person. The biggest driver for data democratization is the technological advancements in data storage, analytics, and visualization tools.
- Data virtualization and federation: When dealing with sensitive information, companies have to take care of protecting user information for security and compliance. Data virtualization and federation tools are catering to the bank’s need for data anonymity. It creates an abstraction layer that addresses issues of access, real-time integration, duplication efforts, and hides all the technical aspects of stored data (location, API, storage structure, storage technology, etc.).
- Cloud storage: While big data is helping develop better analytics to manage vast and disparate data sets. The landscape of this ecosystem is supported by easy cloud storage solutions. Governed data lakes are capable of storing raw and processed data aggregated from several sources (emails, messages, social media, text, etc.). Cloud storage is enabling banks to break data silos by centralizing data stores.
- Self-service: Static reports are dead and there is a need to move towards self-service interactive reports. Enabling the modernization of banking analytics requires the replacement of legacy systems with platforms that enable self-serve analytics. By deploying self-service interfaces, banks are able to accelerate data quality and governance.
- Data monetization: As banks continue their search for new revenue streams, monetizing enterprise data opens up banking-as-a-service platforms. For instance, in the EU, the open banking mandate set a precedent for data sharing banking. The revised payment service directive (PSD2) enables the democratization of customer’s data and payments. Banks share their customer’s data with third parties through public/private application programming interfaces (APIs). This democratization of data has enabled banks to serve as a platform for providing easy access to data, tools for correlating and contextualizing data, and the real-time data analysis quicker decisions.
So, are we there yet?
Above are just a few of the considerations to ensure appropriate Data Democratization and Data Governance. The challenge in data democratization still lies in sharing the data within the stringent compliance rules of the banking sector. Achieving data democratization is not a singular goal, rather it is an ongoing process. Organizations armed with the right tools will be able to navigate the digital landscape. To succeed, companies have to completely govern and manage the usability, availability, integrity, security of the data, irrespective of its location.
Data Democratization is the new normal. Finding a trusted partner would help build the ecosystem required for companies to function to its full potential.