Consumer behavior is changing, challenging traditional business models of every type. Like many companies, financial services firms require ever-more advanced insights to understand – and capitalize on – these changes. As a result, they are increasingly turning to “big data” and data analytics to generate clear and comprehensive insights on their customers and markets.
These financial institutions are also finding that an effective data strategy can significantly help, not only in understanding customer behavior, but also in growing the business, increasing overall cost efficiency, improving capital allocation and protecting the firm from risk. They are finding, as well, that data analytics can improve employee results and even shape a company’s growth. Recruiting the right players in the data field has therefore become critical for today’s financial services companies.
On the offensive side of data, astute data-analytics teams are essential to driving growth and enhancing competitive market factors – from customer retention and the customer experience to branding and product development. In addition, although financial firms have primarily focused on the customer side to date, savvy analytics professionals are increasingly able to improve employee productivity and capabilities across the business.
On the defensive side, an effective data-analytics strategy is essential for protecting both customer and enterprise data, a strategy made even more compelling by the rash of recent, highly publicized security breaches. Financial institutions use analytics to protect the business and partner effectively with regulators and in particular to improve risk management, compliance and information security.
To improve results on both offense and defense, financial services firms must also invest in enhanced data quality and data management initiatives across the enterprise – an enormous effort, given legacy systems and the typically poor integration of these systems across the business. Additionally, active collaboration between strong data and analytics teams and their cyber security peers is needed to prevent further internal or external breaches.
Despite increasing data and analytics requirements, the existing pool of data and analytics executives is small, particularly when looking at candidates within financial services. One reason is that the heavily regulated nature of the industry mandates that personnel come from either financial services or healthcare so they truly understand the demands of the business.
As an additional challenge, employers today are looking for a dual profile: both a strong big data and data management record and a track record of driving positive business results through analytics at the enterprise level. The latter is particularly burdensome, as a majority of financial services firms have traditionally focused on the defensive side of data and analytics – making it difficult to find leaders with experience on the offensive, or business growth, side.
The small pool of available talent makes it important to consider not only the obvious candidates, but step-up candidates as well: leaders who have the right experience and background, but have been operating on a smaller scale, below the enterprise level.
We have found, for instance, that business-line leaders often make strong enterprise data and analytics executives. We also look to data analytics leaders from financial technology (FinTech) and information services companies – leaders who can bring industry knowledge, an appreciation for the regulatory environment and a degree of comfort and experience with the use of data to enhance business results.
In today’s rapidly evolving business and consumer environment, financial services firms require a strong team of data and analytics leaders who can play both “offense” and “defense” – ensuring data quality and security; generating advanced, analytics-driven insights; and shaping the growth required to win the game.
Looking outside the box for these executives will not only increase the chances of finding the right talent in the short term, but grow the overall pool of qualified and experienced executives ready to take the lead in the longer term.
(About the authors: Justin Cerilli is leader for the Data & Analytics Practice at executive search firm Russell Reynolds Associates. Pam Attinger is a leader in the Digital Transformation practice at executive search firm Russell Reynolds Associates.)
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