IDC FINANCIAL INSIGHTS OPINION
IDC believes that achieving customer centricity should be the top priority of every financial institution today. Becoming customer centric, prioritizing the needs of the customer in every decision, will be the most important way to protect market share as younger competitors bring a higher standard of service to the market.
To correctly understand the customer and reflect this in its product and service offerings, a firm will need to make sure its culture and processes are supportive. That is why IDC believes that data governance is of critical importance. The time-honored relationship model of person-to-person interaction through a branch or office network is receding because the cost is too high in the face of digital forms of competition. As business migrates online, customer centricity is becoming, first and foremost, a matter of data.
Any institution serious about improving its customer centricity should be investing in data governance, but our research suggests that data governance projects are currently only being driven by compliance, as European regulators are becoming interested in data quality issues, and making ever-more onerous demands for reports — to finer levels of detail and over shorter timescales.
It is true that financial institutions should see data governance investments as a way of future-proofing themselves against the ratcheting up of regulatory demands. They need to embed good data governance in the DNA of their organization, so that a demand to produce more reports can be absorbed without the need for more resources and the controls are in place to minimize disruption.
However, even if they are satisfied with a project’s impact on dealing with regulatory requirements, financial institutions will fail to maximize the impact of investments if they don’t take into account the potential for improving customer centricity. While a regulator might want to be able to analyze data in real time, the same might apply to a product developer, a relationship manager, or an actual customer.
A financial institution which implements a data governance project by choice and with a view to improving customer centricity, rather than waiting until it is forced to by regulators, will see a considerable competitive advantage.Read the entire whitepaper