Data Management Trends in the Financial Services Sector

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The world is evolving at a rapid pace. New technologies are emerging at a neck-breaking pace. This evolution of technology and data has heightened regulators' expectations and intensified market competition. Advancements in technologies like cloud computing, artificial intelligence (AI), machine learning (ML), and open application programming interfaces (APIs) are also reshaping the data supply chains of financial institutions. This transformative landscape is compelling leaders in data and technology to consider significant modernization efforts in tools and infrastructure to stay abreast of these dynamic shifts. It becomes imperative to invest in a data management program that would lead to a fundamental transformation.


By taking inference from Deloitte's “Data Management ‘Now’ for Financial Institutions Investing in change ‘next’” article, we’ve collated some of the crucial data management trends in the financial services sector and possible agendas to combat the situation.

Key Data Management Trends Reshaping the Financial Services Sector

  1. Transparency Trend: Customers are increasingly aware of how enterprises handle their private data. Transparency is a prevailing trend in financial services, aimed at building trust. Maintaining transparency in data management helps win customer trust, with a focus on safeguarding verification information.
  1. Compliance Management Challenge: It is one of the critical challenges for financial service companies. Many companies are focused on building compliance management programs that would help IT security teams prevent any kind of risk and ensure compliance is well maintained even with any new kind of regulations entering the landscape. Creating compliance management that would help employees adhere to and maintain effective cybersecurity practices.
  1. Cyber-conscious Culture: Employees face diverse cyber threats, emphasizing the need for cyber-awareness training. Many companies prioritize employee cybersecurity training to enhance their ability to identify and respond to various threats.
  1. AI and Machine Learning Implementation: Enterprises leverage technologies like artificial intelligence and machine learning. A majority of financial services professionals acknowledge the positive impact of AI.
  1. Third-Party Vendor Risk Management: Collaborating with third-party vendors is streamlined for operational efficiency and an improved customer experience. Recognizing threats to vendors' cybersecurity as potential threats to their enterprises, companies prioritize third-party vendor risk management in successful data management strategies.
  1. Customer-Centric Approach: Personalization is a prevalent trend in financial services. Employing data governance strategies, enterprises innovate to meet customer preferences and ensure the protection of extensive data, delivering tailored recommendations based on unique needs.

Investments in Defensive and Offensive Agendas

Advancements in technology and ongoing shifts in regulatory demands have prompted the financial sector to update its data priorities and focal points. In light of this rapidly evolving data landscape, data leaders are diversifying their investment in newer forms of offensive and defensive data capabilities.

Offensive agenda

  • Finance & Risk at Core:

Financial institutions are looking for means to automate finance and risk processes. Beyond the realm of automation, institutions are keen on looking for new areas of risk, such as climate change, and stripes of existing risk.

  • Customer-centricity and digital engagement:

Customers are inclined toward flexibility and customization by firms. Financial institutions are looking for means to manage granular customer data to deliver integrated experiences and hyper-personalized services that enable cross-function client data integration and exchange.

  • Analytics-driven growth agenda

Financial institutions are now focusing more on value-generating initiatives and reimagining business models by extending product portfolios and driving innovation.

Defensive Agenda

  • Regulatory Reporting

Financial institutions are adapting to increasingly sophisticated regulatory demands, aiming to provide more detailed and high-quality data. This adjustment is driven by the need to align with evolving compliance objectives, meet higher expectations from regulators, and enhance efficiency in reporting processes.

  • Data Risk, Health, and Resilience

Financial institutions emphasize data accuracy early in the data life cycle and define reporting metrics. Cyber and data risk remain top priorities; boards look to understand enterprise data health.

  • Data infrastructure modernization

The key to successful modernization lies in prioritizing the implementation of a mix of technology, tools, and data based on the most crucial use cases.

Data management is a linchpin for success. The financial industry is embracing evolving trends to stay ahead in an environment driven by data-driven insights, compliance imperatives, and the ever-increasing demand for innovation. Businesses worldwide are impacted by the forces of digital transformation. As financial institutions navigate this data horizon, those adept at harnessing the power of trends will emerge as leaders, shaping the future of the financial services landscape. Checkout the complete blog at Deloitte Data Management

 

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