Data plays a pivotal role in making informed business decisions, particularly in business purchasing and acquisition. Applying data analytics to various facets of a business can unlock vital insights, negate risk, streamline operations, and maximize profits.
This article offers a detailed rundown on the power of data-driven decisions in business purchasing and how analytics can be leveraged in business acquisition, procurement, and more.
The Benefits of Data-Driven Business Purchasing
When you leverage data, you can improve forecasting accuracy, which aids in budget planning and reduces financial risk. Data can also provide insights into supplier performance and quality, allowing you to make informed decisions and negotiate better terms.
Additionally, identifying patterns in your procurement data can uncover opportunities for consolidation, leading to cost savings. Data-driven procurement can enhance your financial stability and improve cost management.
Using Data Analytics for Business Acquisition
Whether you're looking for a restaurant for sale within the US or businesses for sale in Calgary, data analytics can help analyze various aspects of the business. These include:
Thorough Business Evaluation
When buying an existing business, use data analytics to conduct a detailed assessment. This could involve studying the business's past performance, profits, client base, market share, and return on investment.
Financial Data Analysis
With data analytics, buyers can evaluate the financial health of a business. Important elements to be analyzed include revenue, expenses, profit margins, cash flow, and debt level. Besides, forecasted financials can also be scrutinized to predict future performance.
Customer Analysis
It's very important to understand the customer demographics of the business. Analyzing customer data like customer behaviour, preferences, spending habits, churn rate, and customer lifetime value can help in understanding the business's customer base better.
Market Trend Analysis
Data analytics can help to find out market trends and patterns. By assessing the industry's growth rate, market size, and competitor’s performance, you can understand where the business stands in the market and its growth potential.
Vendor Analysis
Evaluate the business's relationship with its suppliers and vendors. Vendor reliability, quality of products, pricing, and delivery timeframes all play a key role in business operations.
Employee Retention
Data analysis can also indicate the turnover rate within the business and provide valuable information regarding employee satisfaction and potential staffing issues.
Risk Assessment
Analyze data to identify potential risks related to the business. These could be operational risks, market risks, financial risks, and compliance risks. This helps you prepare and strategize accordingly.
The Power of Procurement Analytics
Leveraging procurement analytics provides actionable insights into your company's purchasing activities that can aid in decision-making and contribute to the bottom line.
The benefits are substantial, from improved forecasting for budgeting and better risk management to pinpointed opportunities for consolidation.
The types of analysis involved include descriptive, diagnostic, predictive, and prescriptive analytics. Each type offers a different perspective on your procurement process, helping you understand what happened, why it happened, what might happen in the future, and what actions you should take.
Here are some practical applications:
● Spend Analysis: Unveiling your spending patterns enables cost-saving opportunities.
● Supplier Evaluation: Analytics can provide insights into supplier performance, aiding in better partner selection.
● Risk Management: Predictive analytics can help identify potential risks, allowing you to take preemptive action.
● Contract Management: Data can highlight contract inefficiencies, guiding you to negotiate better terms.
● Demand Forecasting: Predictive analysis can help anticipate demand, ensuring you're always adequately stocked.
The Role of Tools in Data Handling
You need these tools to extract, clean, and process the enormous amounts of data that come with procurement.
● Data Extraction Tools: These pull data from various sources into a single platform for easy access and analysis.
● Data Cleaning Tools: These ensure the data's accuracy by removing errors and inconsistencies.
● Data Processing Tools: These convert raw data into a more understandable format for analysis.
● Business Intelligence Tools: These provide visualizations and reports to help you interpret the data.
● Predictive Analytics Tools: These use historical data to forecast future trends, helping you make informed decisions.
Exploring Savings Lifecycle Analytics
This powerful tool can track and analyze the entire savings process in business purchasing, from identification to implementation. This method allows you to understand not just the 'what' and 'how' of your savings, but also the 'when'.
Savings lifecycle analytics enables you to:
● Identify potential savings early in the procurement process.
● Track the progress of these savings through each stage.
● Analyze how effectively these savings are being implemented.
● Understand the temporal distribution of your savings.
● Make data-driven decisions for future procurement strategies.
This approach ensures that every dollar counts, optimizing your procurement process and maximizing your financial efficiency.
Implementing Analytics in Your Business
You need to identify the key metrics that matter to your business. Then, invest in an analytics tool that can track these metrics and generate insightful reports.
Consider these steps:
● Define your business objectives and identify key performance indicators (KPIs).
● Choose an analytics software that suits your needs.
● Train your team on how to use the analytics tool efficiently.
● Regularly review the data and adjust your strategies accordingly.
With a data-centric approach to business purchasing, businesses not only streamline their procurement process but also achieve a robust growth trajectory.
In today's fast-paced financial landscape, data reigns supreme. Financial institutions are inundated with vast amounts of data ranging from customer transactions and market trends to regulatory compliance requirements. Amidst this data deluge, harnessing actionable insights has become a strategic imperative for staying competitive. Enter the data warehouse – a cornerstone technology empowering finance professionals to extract, transform, and analyze data for informed decision-making. Alongside data warehousing, financial software development plays a crucial role in creating specialized tools and platforms tailored to the unique needs of the finance industry, further enhancing the efficiency and effectiveness of data-driven decision-making processes.
What is a Data Warehouse?
A data warehouse is a centralized repository that aggregates and organizes data from disparate sources within an organization. Unlike traditional databases designed for transaction processing, data warehouses are optimized for analytical queries and reporting. They integrate data from various operational systems, such as customer relationship management (CRM), enterprise resource planning (ERP), and trading platforms, to provide a unified view of the organization's performance. Many organizations rely on data warehouse consulting expertise to effectively design, implement, and maintain these critical systems, ensuring they meet the unique requirements and objectives of the business.
Business Benefits of Data Warehousing in Finance:
1. Enhanced Decision-Making: By consolidating diverse datasets, data warehouses enable finance professionals to gain comprehensive insights into financial performance, customer behaviour, and market trends. This facilitates informed decision-making across functions such as risk management, investment strategy, and product development.
2. Improved Regulatory Compliance: Regulatory requirements in the financial industry are stringent and constantly evolving. Data warehouses streamline compliance efforts by providing a centralized platform for storing and analyzing regulatory data. This ensures adherence to reporting standards and mitigates the risk of non-compliance.
3. Operational Efficiency: Traditional data silos impede collaboration and hinder efficiency. Data warehouses break down these silos by providing a single source of truth accessible to stakeholders across the organization. This fosters collaboration, accelerates reporting cycles, and enhances operational efficiency.
4. Personalized Customer Experiences: In an era of heightened competition, delivering personalized experiences is critical for customer retention. Data warehouses enable finance companies to analyze customer data in real time, allowing for targeted marketing campaigns, personalized product recommendations, and proactive customer service.
Use Cases of Data Warehousing in Finance
Risk Management
Financial institutions rely on data warehouses to assess and mitigate various forms of risk, including credit risk, market risk, and operational risk. By analyzing historical data and market trends, data warehouses help identify potential risks and develop proactive risk mitigation strategies.
Financial Reporting and Analysis
Data warehouses play a pivotal role in financial reporting and analysis, enabling organizations to generate accurate and timely reports for stakeholders, regulators, and investors. By consolidating financial data from disparate sources, data warehouses facilitate comprehensive financial analysis and forecasting.
Customer Segmentation and Targeting
In the fiercely competitive financial services industry, understanding customer preferences and behaviour is paramount. Data warehouses enable segmentation and targeting based on demographic, behavioural, and transactional data, allowing organizations to tailor products and services to specific customer segments.
Implementing a Data Warehouse in Financial Business in 5 Easy Steps
To implement a data warehouse effectively within a financial business, a structured approach is essential.
Step 1: Define Objectives and Requirements
Begin by clearly defining the objectives of the data warehouse implementation. Identify key business requirements, such as regulatory compliance, risk management, financial reporting, and customer analytics, to determine the scope of the project.
Step 2: Assess Data Sources and Quality
Conduct a comprehensive assessment of existing data sources, including transactional systems, CRM databases, trading platforms, and external data feeds. Evaluate the quality, consistency, and completeness of the data to ensure accuracy and reliability in the data warehouse.
Step 3: Design Data Model and Architecture
Develop a robust data model and architecture that aligns with the organization's goals and requirements. Determine the structure of the data warehouse, including dimensions, facts, and hierarchies, and design an architecture that supports scalability, performance, and security.
Step 4: Data Integration and ETL Processes
Implement data integration processes to extract, transform, and load (ETL) data from disparate sources into the data warehouse. Develop ETL workflows to cleanse, standardize, and enrich the data to ensure consistency and accuracy.
Step 5: Implement Data Governance and Security
Establish data governance policies and procedures to ensure data quality, integrity, and security throughout the data warehouse lifecycle. Implement access controls, encryption, and auditing mechanisms to protect sensitive financial data from unauthorized access and breaches.
By following these five main steps and adopting a systematic approach, financial businesses can successfully implement a data warehouse that empowers them to unlock valuable insights, drive informed decision-making, and achieve their business objectives effectively.
Empowering Finance Through Data Warehousing
In the ever-evolving landscape of finance, data warehousing stands as a beacon of innovation and efficiency. As financial institutions navigate through intricate regulatory frameworks, volatile markets, and evolving customer expectations, the role of data warehouses becomes increasingly indispensable. By consolidating diverse datasets and providing a unified view of organizational performance, data warehouses enable finance professionals to make informed decisions, mitigate risks, and seize opportunities with confidence.
Moreover, data warehousing fosters a culture of collaboration and efficiency by breaking down traditional data silos and providing stakeholders across the organization with access to a single source of truth. This not only accelerates reporting cycles and enhances operational efficiency but also facilitates personalized customer experiences through targeted marketing campaigns, product recommendations, and proactive service delivery.
In essence, data warehousing has transcended its role as a mere technology platform; it has become a strategic enabler for finance companies to thrive in a data-driven world. By harnessing the power of data, financial institutions can unlock valuable insights, drive innovation, and ultimately, deliver superior value to customers and stakeholders alike. As the finance industry continues to evolve, the transformative potential of data warehousing remains steadfast, guiding organizations towards success in an increasingly competitive landscape.
The availability of vast amounts of data presents an incredible opportunity to gain valuable insights into customer behavior, market trends, and competitor strategies. By tapping into this data goldmine, businesses can make informed decisions, tailor their sales and marketing efforts, and ultimately drive revenue growth. It's time to recognize the immense power that lies within data and harness it to unlock unprecedented success.
Driving Precision: Leveraging Data for Targeted Campaigns
Gone are the days of generic mass marketing campaigns. With the power of data, sales, and marketing teams can now achieve precision like never before. Outlets, and information access such Enigma's business data provide are proof of this. By analyzing customer data, businesses can gain a deep understanding of their target audience, their preferences, and purchasing patterns. This knowledge allows for the creation of highly personalized and targeted campaigns that resonate with customers on an individual level. Whether it's through segmentation, predictive analytics, or customer profiling, data-driven marketing ensures that every message hits the mark and maximizes the return on investment.
Uncovering Opportunities: Spotting Trends and Market Insights
Data holds the key to unlocking hidden opportunities and staying ahead of the competition. By analyzing market data, businesses can identify emerging trends, spot gaps in the market, and capitalize on new opportunities. Through data-driven insights, sales and marketing teams can understand customer needs and preferences, adapt their strategies, and develop innovative products or services that meet evolving demands. Data-driven decision-making empowers businesses to be proactive rather than reactive, positioning them as industry leaders and driving sustainable growth.
Streamlining the Sales Process: Data-Backed Sales Strategies
Sales teams can significantly benefit from data-driven strategies to enhance their performance and close deals effectively. By leveraging customer data and sales analytics, sales professionals can prioritize leads, identify cross-selling or upselling opportunities, and tailor their sales pitches to individual prospects. Data-driven insights provide valuable guidance on customer objections, pain points, and preferences, enabling sales teams to craft compelling arguments that resonate with their audience. With data as their ally, sales professionals can streamline their processes, increase efficiency, and achieve higher conversion rates.
Measuring Success: Tracking Metrics and Evaluating ROI
Data plays a vital role in measuring the success of sales and marketing efforts. By defining key performance indicators (KPIs) and tracking relevant metrics, businesses can gauge the effectiveness of their campaigns, monitor sales performance, and evaluate return on investment (ROI). Data-driven analytics provide real-time visibility into campaign outcomes, customer engagement, and revenue generation, allowing businesses to fine-tune their strategies and optimize their resources. With data-driven measurement and analysis, sales and marketing teams can continuously improve their performance and ensure that every effort contributes to the bottom line.
Conclusion
Data has emerged as a powerful asset for sales and marketing professionals, offering unprecedented opportunities for success. By leveraging data to drive targeted campaigns, uncover market insights, streamline sales processes, and measure performance, businesses can stay ahead in a competitive landscape. Embracing the power of data is no longer optional; it's essential for businesses that aim to thrive and achieve remarkable results in today's data-driven world. So, unlock the full potential of your business data and witness the transformative impact it can have on your sales and marketing endeavors.
Fashion, social causes like prevention of cruelty to animals, ecological concerns, and minimalism are currently core elements. But they may change as you read this page. That’s how quickly consumers’ minds are changing and businesses are trying hard to keep up with it.
Some businesses are no longer predicting consumer preferences but influencing them to choose their future products. Thereby a market is created and catered to while competing brands are still assessing what the consumer wants in the future.
Using data for insights
The only way companies can create a niche space in the constantly changing comer dynamics is by grasping the perspective of the present and future consumers. Businesses can make intelligent use of the insight community platform to take proactive decisions that will improve the process and eliminate the wastage of resources.
For instance, if a company is manufacturing an everyday necessity product like budget sofas, then it pays to understand if consumers are willing to pay more for durability or aesthetics. Matching the requirements, running it against the product line available from competitors, and drawing up its strengths, will allow the company to manufacture a product line that can please the crowd. A well-made product is sold out with very little effort in this age of information, where consumption is not far away even though the consumer is at a distance.
The insight community is a valuable tool
To understand how insight communities can be used advantageously, a business needs to know what comprises one. Think of an insight community as an online forum or town hall, where all the stakeholders who are connected to the business and may hold even a passing interest meet, share ideas, and news, collaborate on tasks, resolve issues that concern, and voice their opinions.
Few debates are healthy, and few can lead to a social-media brawl, but every event will give the moderators and insights community in charge team members important takeaways. These pointers act as those neon stickers on a dark road that guide the first wanderers. Without the points that the content and insight-community management team picks, from what seems like social-media banter, feeling the real pulse of the consumer who is connected more to the smartphone than to the real world is difficult.
Need to optimize data from the insight community
Often it is seen that though companies initiate and maintain an insight community platform, they are not using it effectively. Data collected and unused will become worthless as it comes with a shelf life, and old data should be archived but often does not hold much value.
Companies should not just come up with an in-house insight community platform that acts as a bridge between the enablers and the end-users of their products but also come up with strategies to make it a happening hub of information and ideas.
Here are a few pointers to maximize the data output and its uses from an insight community platform:
An insight community should aim at including all kinds of consumers who may have used the product and services in the past. It should also include people who are interested in availing the brand services in the future. Even developers who are interested in the technology and like to brainstorm about open-source codes for the technology should be attracted to the platform. So the entry should be free and fair with the only barrier being the interest in the product to target the right category of audience. In this manner, the related content will also be targeted, and efforts taken to avoid derailing from the core topic through group moderation.
The idea of unleashing the power of an insights community platform is to help in ideation, which is inclusive of consumer insights to develop future-ready products. And in line with the perception of customers. Using effective analytics and consistent filtering from the platform teams can predict and discover new concepts. Understanding the current process, improvising or maintaining the standard, and forecasting future outcomes become easier when the insight community is vibrant and active.
An insights community acts like a mind reader. The team that is managing an insights community needs to scan the content regularly so that important data projecting consumer preferences do not go unnoticed.
Regular exercises to collect relevant and related data points should be conducted to assess the pulse of the consumer.
Organizations can channel and streamline their resources to come up with saleable products that have been designed keeping consumer preferences in mind. Identifying new opportunities and working towards maximizing products is possible when one listens to consumers.
- Improve customer engagement
When participants of an insight community are engaged proactively and the discussions prove to be productive more people join the discussion. There will be long trails of messages along the same lines and the brand with help of engaged consumers and stakeholders becomes a trending topic.
In this manner, the brand gains popularity without any hardcore advertising and invokes the interest of more people who will be interested to join the insight community. Being a member of a few insight communities is regarded as a cool and woke thing for most Gen-Z people.
Summing-up:
Community platforms offer crucial insights that can act as game changers if the team can understand how to utilize the information. Deciphering between the lines is as important as collecting data and insights when it comes to data sourcing and business intelligence.
The platform can be used to mitigate future risks like needing to increase the price to keep a decent range of profit margins. Businesses instead of introducing higher prices can first let consumers understand the need to increase the same like raw material cost and the entity’s perseverance not to cut back on the quality as primary reasons for a small increase in the price. If used intelligently, insight communities are a powerhouse of information and decision-enabler tools.
But as with any emerging technology standard, progress is littered with both milestones and speed bumps. Below I will outline some of my key observations from working with leading players in this space.
Open Banking will reshape the global financial services system
It is no longer a question of if Open Banking will continue to evolve, but a question of how quickly it will accelerate. As Open Banking’s remit continues to expand, it will fundamentally change how we use financial products.
Open Banking can be used to assess a consumer’s creditworthiness, for example, by opening the doors to novel products aimed at supporting financial health and inclusion.
The complex world of credit scores will be simplified through the transparency Open Banking provides. Authorised Open Banking fintechs can securely access a customer’s bank account to see incoming and outgoing transactions, providing a foundation from which to accurately assess users’ credit scores and personalise services accordingly.
Personal Financial Management platforms (PFMs) like Money Dashboard are leveraging Open Banking technology to provide their clients with insights into transaction behaviour. Its retailer clients, such as supermarket chains, benefit from a better understanding of what their customers spend their money on when they are shopping at other stores. Its investor clients, meanwhile, use the data to predict how companies are operating in order to decide whether to invest in a stock.
Another example of a company paving the way forward is Bud – which is demonstrating what is possible through Open Banking-powered personalisation and AI automation. Banks use Bud’s products to automate lending decisions and perform more accurate affordability checks – improving risk assessment while delivering more tailored services to their customers.
From Open Banking to Open Finance
In the future, Open Banking will evolve into Open Finance, meaning that data-sharing will not be limited to transactional bank account data only. Other types of (financial) information will become accessible to authorised third parties, creating a more interconnected financial ecosystem.
Crypto wallets, pensions, insurances, mortgages, stock trading and other wealth management accounts – will all become accessible to facilitate easier exchanges of data, helping providers to establish a comprehensive digital overview of a customer’s financial position and encourage continued innovation.
These benefits will not be limited to retail customers. Another important area of expansion will be to use Open Banking solutions in the B2B space. Highlighting the potential use-cases, McKinsey estimates that merchants collectively spend $100 billion annually on transaction fees. Through account-to-account (A2A) payments, Open Banking players are already enabling the direct transfer of money between accounts without relying on third-party intermediaries or payment cards – offering a real-time and cost-effective solution to the problem.
Overcoming the biggest challenges
There are three main obstacles on the road to Open Finance:
1. Access to data
How do we make it easy for providers to access data from a broad range of financial institutions? Technological integrations (APIs) must be built to support the efficient flow of data, but building integrations that work with each financial institution is a tedious and fragmented process. To facilitate this, data and API standardisation needs to be implemented in order to make the task of providing access to data across the whole ecosystem simpler.
On the other hand, the reluctance of institutions to share highly valuable customer data will restrict access. This means regulators will need to step in – as they did for Open Banking – to create a legal environment that opens financial data for third parties to access through standardised APIs.
2. Analysing the data
Making sense of huge volumes of data is already a gargantuan task, even when it “only” covers Open Banking data. This becomes even harder if data from a wider set of financial products is considered. Fintechs will need advanced categorisation engines and other analytical tools to structure and analyse the information they receive.
Fintechs and companies can have access to all the Open Banking data in the world, but if they cannot create a way to analyse it, they will struggle to draw out any valuable insights. Leading providers like Money Dashboard have already done the legwork when it comes to data analysis – its Open Banking categorisation engine has been trained on over 10 years of data, which allows it to accurately classify consumer transactions. Other providers must follow suit if they haven’t already.
3. Compliance
Whenever personal information is shared, it is crucial to have a stringent compliance framework in place, to prevent any breaches or misuses of data. This, however, is not the challenge – the real challenge is ensuring that regulation protects the consumer, without stifling innovation.
In order to achieve this delicate balance, regulators will need to have open and constructive dialogues with Open Finance providers, and together create an environment that nurtures innovation without threatening data privacy.
An M&A outlook
Open Banking is still a relatively early-stage technology, so we will continue to see a lot of investor activity in this space, with the market expected to grow to $43 billion by 2026.
Companies with an innovative product and state-of-the-art tech will have no problems raising funds. For instance, UK-based Bud raised $80m in June to continue to scale its AI-based Open Banking platform and expand internationally.
In the M&A space, we expect to see an increase in activity as small, unprofitable companies (who have developed good technology) might decide to look for a buyer as Venture Capital funding becomes harder to access. Some of the industry’s largest players could also merge in order to consolidate the market, create synergies and expand their reach.
Notably, Apple’s recent acquisition of Credit Kudos, which develops software that uses consumers’ banking data to make more informed credit checks on loan applications and is a challenger to the big credit reporting agencies (Equifax, Experian and TransUnion)., signals interest from further afield. With more and more businesses making inroads into financial services, M&A activity in this space is heating up.
Having advised on a number of M&A and fundraising transactions in the Open Banking space, Royal Park Partners have seen first-hand the impressive leaps companies are making to transform Open Banking and increasingly Open Finance into a positive and productive tool for customers and businesses. In the future, Open Finance will provide the infrastructure to connect all financial products that consumers and businesses use, while also providing access to innovative new solutions.
The digital imperative for financial services firms cannot be understated. In order to ensure their (and their products’) relevance in the future, they will have to embrace Open Banking and Open Finance technology.
About the author: Ricardo Falter is Fintech M&A Associate at Royal Park Partners.
The advent of HMRC’s Making Tax Digital (MTD) initiative has changed the way in which we process and arrange our tax affairs irrevocably. Whilst previously only businesses with a taxable turnover above £85,000 had to comply, since April of this year, all VAT-registered businesses have been subject to mandatory online MTD submissions. Soon, similar regulations will apply to Corporation Tax (CT). But what does this mean for how we submit our returns and are most companies ready?
Disconnected data
Traditionally, VAT and CT, with their widely varied deadlines, have not been connected for reporting purposes. However, this is set to change when MTD for CT arrives, as the new quarterly CT submissions will have to be sent to HMRC within days of their equivalent VAT filings. This means that it makes sense for organisations to align their VAT and CT processes more closely.
The reality remains, though, that currently most companies are simply not prepared to leverage data across multiple MTD streams. Today’s typical accounting landscape has siloes with specialists dedicated to one specific area – be it VAT or CT – with separate data and separate timescales. Unsurprisingly, this means that tax advisors can be skilled in either CT or VAT but rarely in both. As processes continue to align, this presents a challenge.
Also notable is the fact that CT filing happens twelve months after the end of the CT financial year whereas VAT fillings happen quarterly or monthly, with reporting occurring 30 working days after. Such distinct deadlines don’t have data overlap because CT uses data that has long since been checked and finalised, while VAT-related data can be subject to change during the reporting cycle. Currently, this is no major problem but the arrival of MTD for CT with its new reporting cycles will disrupt the landscape.
Changing reporting cycles
When MTD for CT arrives, there will be additional data to submit on a quarterly basis, bringing VAT and CT tax data closer than ever – with greater interaction between the two. If your company follows calendar quarter, it currently files its VAT returns on May 5th. Going forward, you will also be submitting CT returns on 30th April, making the time between submissions much shorter. Naturally, this means that data must be aligned across both processes and that the CT team will need visibility of the VAT team’s reporting and vice versa.
So how do we connect these disparate teams more closely? Firstly, we need to revamp the legacy, siloed approach to CT and VAT and instead introduce fully integrated tax teams. This will encourage a holistic, transparent view of both disciplines underpinned by a single source of truth, enabling clarity and seamless processes throughout the tax department.
Secondly, we can look to technology to provide new ways of doing business. Too many companies still depend on Excel and similar software to enable their MTD calculations even though this puts severe constraints on processes. This old-fashioned approach needs continual manual updates, with great potential for human error, risks regulatory compliance and lacks smooth integration with other financial systems. With HMRC recently issuing updated guidance on penalties relating to MTD for VAT non-compliance, the incentive to not make mistakes continues to grow.
New opportunities and added value
The time is right, therefore, for companies to evaluate the new generation of UK-specific VAT and CT applications. These are less time-consuming, integrate seamlessly with other core IT platforms such as ERP, and automatically update according to the latest regulations. Specialist software also has the potential to minimise risk, improve precision and increase control while boosting efficiency. This can help companies of all sizes to eliminate common problems, such as laborious data formatting.
Modern, best-of-breed financial systems and VAT calculation tools can also generate value beyond meeting MTD compliance requirements. They provide more precise, timely and transparent data, which enables smarter decision-making and improved business intelligence.
This consistent access to large volumes of accurate data provides clearer insight into the profit margins in different areas of your business, helping companies identify disparities. This data can also be extracted beyond the tax department to the broader business where additional value can be leveraged.
At the same time, they enable more complex calculations, such as partial exemption, helping companies potentially recover more in VAT, for example. Not only does this ensure faster results, but it also takes the monotonous number crunching out of the hands of skilled professionals who can be redeployed to more high-value tasks.
Introducing the cloud
The traditional approach to on-premise computer platforms was to get tied into lengthy, expensive partnerships with big legacy vendors, requiring significant upfront investment in both hardware and software as well as costly ongoing maintenance. This might well provide access to an extensive solutions portfolio but is not always the best tool for the job at hand.
Today, companies are increasingly turning to the cloud instead, where best-of-breed solutions can be built from an ecosystem of existing components, connected via APIs. This means you can build the specific solution you need in less time and with fewer upfront costs, paying only for what you need when you need it.
A vision for the future
By integrating tax departments across VAT and CT and migrating to new, flexible, constantly updating cloud technologies, companies can futureproof themselves for whatever comes next on the MTD journey. Furthermore, outside of HMRC regulations, many anticipate that wider EU standards will be introduced to address similar issues. With the right solution already in place, companies will be able to comply quickly and with minimal effort.
MTD for CT is set to be introduced in 2026, which may seem like the distant future, however re-evaluating your tax reporting processes, integrating data across tax teams and implementing versatile solutions today will ensure you are well ahead of the competition. Starting to make the necessary changes now means that your team will be fully integrated and efficient – having already ironed out any preliminary issues – ahead of the compliance deadline. Using all the available data in the most connected, transparent and accessible way, will ensure VAT and CT are synchronised for success.
For more information visit https://www.taxsystems.com/.
Fintech companies are on the rise, with more and more people using them to manage their finances. The international fintech market is projected to grow rapidly, reaching a value of about $324 billion by 2026. It will develop with compound annual growth of approximately 25.18 percent between 2022 and 2027.
This skyrocketing growth prediction shows the relevance of fintech companies in the current world. These companies are also under constant pressure to develop new tech and services. And while creating these services, they need to safeguard customers' data.
This article will help you comprehend the reasons behind the increasing need to prioritize privacy in the fintech industry.
What is data privacy?
Data privacy is the degree to which individuals should be allowed to access, possess, use, and share information. For example, you wouldn't mind sharing your name with a stranger while making an introduction, but you would not want to do so until you've gotten to know one another better.
Furthermore, when sensitive data enters the wrong hands, things can go wrong. A data breach at a government office, for example, might result in sensitive information being released publicly. A data security incident at a school might jeopardize students' personal information, which could be used to commit identity theft.
Therefore, the risk of losing data is everywhere, and each sector must take action to eliminate this. If privacy is breached, the company will suffer financially and reputationally. But the good thing is that consumers are more aware of their data privacy rights than ever before and are vocal about when their privacy is violated.
Why do fintech companies need to prioritize privacy?
This is the digital age, and one cannot forget that the number of hacking cases is increasing every year. The attacks on big companies like Equifax have made it clear that no company is safe from cybercrime.
Besides the risk of cybercrime, fintech companies also need to prioritize privacy to protect their users from other dangers. For example, if a customer's data falls into the wrong hands, it can be used for blackmailing or identity theft.
Users themselves show incredible interest in security and privacy-focused options online. They might drop certain services if their operation or track records seem invasive.
For one, more privacy-conscious people choose to download VPN apps to minimize their digital footprints. A Virtual Private Network protects data exchanges online by encrypting internet traffic. Thus, users connect to VPNs when making financial transactions online. It gives users peace of mind and more confidence to conduct business online.
To comply with regulations
One of the main reasons fintech needs to prioritize privacy is to comply with regulations. Financial institutions have always been subject to stringent regulation, and fintech companies are no exception. They need to ensure that all customer data is protected and secure. It is particularly crucial considering recent data breaches suffered by Capital One.
To protect customer data
Another reason why fintech needs to prioritize privacy is to protect customer data. As mentioned above, financial institutions are subject to stringent regulations to protect customer data. Fintech companies need to ensure that all customer data is protected from unauthorized access, use, and disclosure.
To protect the company from liability
If a fintech company doesn't take the necessary precautions to protect user data, it could be held liable for the damages or losses suffered as a result. It could include financial losses, loss of business, and damage to reputation.
To build trust with customers
One of the main reasons fintech companies exist is to build trust with their customers. If customers don't trust a company to protect their data, they are unlikely to do business with it. Trust is essential for any company that wants to succeed in the fintech industry.
To compete with other fintech companies
Competition is fierce in the fintech industry, and companies need to do whatever they can to stand out from the crowd. Offering superior levels of privacy and security is one way to do this. Moreover, this can be the unique point of their success story.
To attract new customers
To grow, fintech companies need to attract new customers. One way to do this is by offering superior levels of privacy and security. This will make customers feel more comfortable doing business with them, and they may be more likely to recommend them to others.
To retain current customers
Fintech companies also need to prioritize privacy to retain their current customers. If customer data is mishandled or security breaches, customers can decide to take their business elsewhere.
To prepare for the future
The fintech industry is constantly evolving, and companies need to prepare for the future. In the same way, cybercriminals are also preparing for the future and speeding up the process to stay ahead of time.
So, one way to deal with this is by ensuring that all customer data is protected and secure. This helps build customer confidence and ensures that the company is well-equipped to deal with future challenges.
Conclusion
The fintech industry is rapidly evolving. Companies are putting efforts to do whatever they can to stay ahead of the curve and protect their customers' data. Privacy is essential for companies in the fintech industry, and the reasons for the same are explained briefly above.
Mark Jenkins, Chief Finance Officer At MHR International, explores how digital transformation has fuelled the need for finance teams to move away from outdated software and embrace a more suitable way of processing data.
A recent MHR survey revealed that over half (51%) of finance leaders depend solely on Excel for their processes – a figure more reflective of the industry’s lack of tech investment than of the usefulness of a software tool now over 30 years old.
Accordingly, many finance leaders are missing out on opportunities to reshape their role due to being weighed down by time-consuming and tedious manual tasks. This is also using up valuable time which could be better spent feeding into bigger-picture business strategy conversations. Should they continue to be left out in the cold, businesses risk missing out on a wealth of expertise, knowledge, and crucial financial data.
If finance professionals want to take their rightful place at the strategic table, they must become drivers of tech implementation.
Stuck with spreadsheets
Excel is still deeply entrenched in the culture of many finance departments. Often seen as a tried-and-tested, ‘safe’ tool, spreadsheets owe their ubiquity to organisations’ traditional reluctance to spend out on innovative software and processes. After all, it is daunting to ditch the only business analytics tool you have ever known in favour of something new, especially when to date your organisation has been completely reliant on it.
But while Excel is great for rudimentary calculations, its shortcomings in today’s interconnected global finance ecosystem are more obvious than ever. In a world that is increasingly driven by collaboration and information sharing, Excel is simply incapable of providing the multi-user support and complex, real-time data analytics needed for successful financial modelling and forecasting.
Furthermore, Excel cannot always be relied on to keep data safe and secure. Recent headlines have made this painfully apparent: in 2020, almost 16,000 positive Covid cases vanished from Public Health England’s contact tracing system in a high-profile IT glitch. The reason? Excel had run out of numbers. With almost a third (31%) of finance leaders rating unsaved spreadsheets and lost documents as the greatest risks of their role, such costly and embarrassing errors should spur businesses to prioritise data integrity and move away from outdated spreadsheet tools.
Leaders or laggards?
Reliance on legacy processes is also hindering the strategic growth of finance leaders and their teams. MHR’s survey found that almost half (44%) of leaders are left out of business strategy conversations, as they find themselves overburdened with cumbersome manual processes. Wasting time copying and pasting data from one spreadsheet to another, talented finance professionals are currently robbed of the chance to participate in long-term scenario planning, leaving them vulnerable to future market changes and missed growth opportunities.
As a result, technical debt and legacy mindsets are holding finance teams back from flexing in their role and using their expertise to shape important strategic initiatives. This seems thoroughly at odds with the digital transformation happening across all industries. If finance leaders want to be the drivers of the data analytics revolution, they must leave Excel in the past and embrace smarter tools.
From stagnation to automation
Accelerated digitisation has fuelled the need for finance teams to ditch outdated Excel software and adopt more suitable ways of processing data. By implementing agile and collaborative scenario-planning solutions, finance departments can seamlessly plan and model for the future, enabling them to use their insights to shape long-term business-wide strategy.
Automation is the key to future-proofing finance teams. It removes the need for professionals to reach down and perform tedious, time-consuming manual tasks, thereby freeing them to undertake more high-value endeavours and provide forward-thinking strategic advice at board level. Furthermore, automated processes support teams in boosting their compliance, accuracy, and data security, considerably lightening the load.
The right integrated corporate performance management solution goes beyond basic financial planning: new market entrants can incorporate extended planning and analysis (xP&A) to put finance leaders back in the driving seat to make more efficient strategic decisions. This enables teams to make considerable time and cost savings, setting themselves and the wider business up for a more productive and profitable future.
In today’s increasingly challenging and competitive commercial environment, financial data cannot sit siloed with individuals, nor be held in obsolete IT systems. The right tools and solutions will ensure greater data visibility across the wider business to help support long-term decision making. In addition, tech implementation can free finance leaders and their teams from low-value, repetitive manual tasks, securing much higher levels of efficiency, responsiveness, and agility.
However, there’s a lot that you can do with dedicated proxies. This is especially with more sensitive tasks like banking. With fraud on the rise, internet banking can be risky without using a security tool such as a dedicated private proxy. It’s an intermediary mechanism that prevents data theft on banking systems.
If you do private baking, understanding why you need a proxy server is vital. This article looks at some of the reasons to buy dedicated proxies for private banking purposes. This article will help you know whether dedicated proxies are worth buying for banking privacy and security.
1. Improve Customer Experiences
Server overload problems are common in banking systems worldwide. This is because everyone wants to transact conveniently through the internet. With many requests coming, it is easy for a server to break down. Thankfully, this is preventable with the use of the right load balancing tools.
Most web admins use dedicated proxies to ensure proper load balancing. This load balancer works by distributing workloads across various servers to ensure that no server gets overwhelmed. Some servers may go down if you do not use such tools because they cannot handle a high number of requests.
A dedicated proxy server makes dynamically generated content available to users. It ensures smooth delivery of requests to the server and responses too. In general, most of the work gets delegated to the proxy server. This frees the application server so that it receives new requests efficiently.
This then means better customer experiences in the end. Improved server performance is also great for banking institutions. It also means more transactions and a higher customer retention rate. Thus, financial institutions and their customers must buy dedicated proxies for their banking needs.
2. Use Less Data
Financial institutions can establish their online services on websites, applications, or both. For website banking, a customer needs to click on the URL every time they want to transact. The good news is that the website doesn’t need to load from scratch if you are using a dedicated private proxy.
You can take advantage of the caching function of dedicated proxies to ensure that. Proxies cache websites that you frequently visit, making them display quickly in subsequent visits. Banking websites that you may use frequently aren’t an exception, which increases the efficiency of transacting.
Financial institutions can also use proxies to cache competitor websites. This is when they are using scraping proxies to monitor their competitors. Using a proxy for scraping ensures that you can gather data from competitor websites anonymously. This helps you improve your services and be competitive.
Thus, web scraping proxies can also cache these websites. So, you won’t need to load them from scratch when you want to check them for updated information. In the end, the businesses and private users who leverage the power of proxies reduce network costs significantly.
3. Reduce Risks Of Fraud
As discussed before, banking fraud is increasing every day. Banking institutions lose business and customer data to cybercriminals using various techniques. Even though they invest in their systems and improve them, the threat landscape is dynamic, and you can never be assured of safety.
Thankfully, security tools such as dedicated proxies can guarantee your online privacy and safety. A dedicated proxy server encrypts data in transfer, keeping it away from prying eyes and bots. This ensures that attackers cannot use the data even if they access it.
Also, private proxies secure data even when it is on your network. Hackers do not have to target your data when it gets transferred to and from your network. They can hack a network then steal or alter your stored data. A dedicated proxy server protects your data 24/7, which mitigates fraud cases.
4. Increase Speed In Banking Processes
Speed is a vital thing when it comes to monetary transactions. You want to pay for a service or product quickly and move on to other tasks. This is one of the reasons why you should think about investing in a dedicated proxy server as a banking business or customer.
A proxy brings you closer to the banking server, which makes transactions fast. The closer you are to the banking server; your transactions will be smoother. For a banking business, this enhances transactions making them process payouts faster and meet customer expectations.
You can buy cheap private proxies as a banking user. This is vital even if the banking institution you are transacting with has a proxy server in place. It increases your privacy, security and also increases the transacting speeds, which means a better experience.
Also, the faster you transact, the better. You’ll easily become a target for cybercriminals if you spend a lot of time on a single transaction. If requests don’t go through multiple times and you receive error messages, there are chances you could get exposed. A dedicated proxy server can help prevent this.
Conclusion
There’s no doubt that internet banking has made life easy for many people. Today, everyone prefers sending and receiving money from the comfort of their homes. But then, there’s a need to transact safely, especially today when different techniques of banking fraud are coming up daily.
A dedicated private proxy is one of the best tools you can use for private banking. It can increase your privacy and security by encrypting the data you transfer to and from banking websites. Besides that, it can also help you save on data and increase your banking speeds without compromising your security.
Financial institutions can also benefit greatly from using proxies for transactions. Using super-fast proxies can make banking more efficient. Customers will complete transactions faster and with more safety and privacy. This efficiency of dedicated proxies can help improve customer experiences.
Application programming interfaces (APIs) are a vital innovation able to transform treasury banking – making financial institutions more agile, innovative and highly experiential to support their clients’ needs, writes BNY Mellon’s Sindhu Vadakath, Head of Global Digital Channels and Asia Payments Product Management.
From real-time payments to account authentication and real-time payment exception handling, digital services have become a prominent part of financial institutions’ (FIs) offerings to treasury customers. Clients are increasingly looking for fast and frictionless experiences throughout the transaction life cycle – including pre-processing, during processing and post-processing. Application programming interfaces (APIs) are providing valuable real-time experiences that help address these needs.
APIs enable streamlined, efficient communication and integration between software components. By using APIs, FIs can offer greater speed and efficiency, and, by harnessing process automation, can provide instantaneous transactional data and actionable insights; as well as real-time visibility over payments, statuses and transactional balances for efficient cash management.
The increasing potential of APIs has been fueling industry innovation, disruption and connectivity, and many FIs have already integrated APIs into their operations. Now, with the ecosystem being driven towards greater levels of harmonisation – through initiatives such as the global migration to the ISO 20022 messaging standard – APIs are beginning to shape the future of banking.
Achieving business goals
APIs can connect the digital ecosystem while bringing numerous back-end and client-facing benefits. A critical advantage of APIs is the ability to integrate real-time balances and transactional data across multiple channels, including Treasury Management Systems (TMS) and Enterprise Resource Planning (ERP). For example, through BNY Mellon’s Treasury Payments API, clients can integrate FIs’ solutions within their own internal systems. Clients can seamlessly perform business operations by automating payment processes, as well as streamline necessary treasury operational tasks such as reconciliation and reporting. Clients can also leverage the technology to securely access global payment capabilities through a single endpoint, enabling them to initiate payments and track the status of transactions end-to-end.
APIs can connect the digital ecosystem while bringing numerous back-end and client-facing benefits.
Through such solutions, clients can enjoy the time and resource saving benefits of real-time data sharing, especially through the pre- and post-transaction processing lifecycles. The automation and streamlining of operational processes allow clients to redirect their resources to more value-generating functions, such as forecasting analysis, customized reporting and transaction capabilities.
Return on investment
After several years of investment in APIs to deliver integration solutions, FIs are already seeing a strong return. Benefits include retaining clients through improved client satisfaction and resiliency, as well as unlocking legacy data and eliminating manual processing.
And APIs now play an important role in business continuity plans (BCPs). The importance of having an established plan to offset against the impact of unexpected events has been confirmed by the COVID-19 pandemic. In the case of a disruption or network outage, FIs are using APIs to seamlessly switch to a digital, active-active alternate channel to process their payments – traditionally, a resource-heavy process between FIs and network providers to ensure timely execution without any financial implications. By integrating APIs into their networks, FIs can smoothly transition to their back-up plans during such exigencies.
For banks such as BNY Mellon, integrating APIs with their clients’ operations is a way of offering value-driven, tailor-made solutions to support business agility and innovation for clients. As opposed to a one-size fits all approach where offering a standard product isn’t the goal, APIs provide a solution-based target where the client can be kept at the center, and their unique needs – whether that be authentication, validation services, exception handling, or real-time access to data and reporting on payments and account activity to take timely actions – can be solved through APIs and other digital capabilities.
Looking to the future
While the finance industry is learning to leverage API technology, the size and complexity of the solution required can sometimes impede the success of delivery. For example, an API might need to work for multiple parties across various jurisdictions that are each bound by regulations in their domestic markets. As a result, a number of consortiums, formed by both fintech and financial firms, are working on ways to resolve these issues.
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In fact, FIs are responding through collaboration and partnerships – with each other, with fintechs, and with industry networks and participants, such as SWIFT. Where FIs focus on upgrading legacy systems and data architecture, they see opportunities to partner with fintechs to accelerate the process. Meanwhile, FIs can offer fintechs with real world client use cases, problem statements and the ability to deliver their innovations across a range of situations and sectors, leveraging each other’s expertise to address industry needs to stay relevant.
One of the biggest challenges for adoption is the difficulty in maintaining multiple variations of the message specifications by channels, currency and markets. However, the way to overcome this challenge is through increased standardisation, and the upcoming migration to ISO 20022 could reduce a lot of these frictions, by improving cross-border interoperability and streamlining the exchange of data for APIs. It is going to be a journey towards harmonisation that requires the industry to come together to chart the path towards the digital future.
As FIs continue to invest in new technologies and further leverage the benefits of APIs, they move closer to not only achieving their strategic business goals, but also enabling their clients’ own digital transformation goals. Banks and other FIs have the responsibility to continue to explore agile, innovative and integrated API solutions, ensuring that clients can benefit from the host of opportunities APIs will bring as they shape the future of the industry.
The views expressed herein are those of the author only and may not reflect the views of BNY Mellon. This does not constitute Treasury Services advice, or any other business or legal advice, and it should not be relied upon as such.
Steve Cox, Head of Accountancy at IRIS Software Group, shares his thoughts on MTD and its implications with Finance Monthly.
HMRC’s prompt decision to delay the next phase of the making tax digital (MTD) rollout in 2020 due to the coronavirus was a welcome move. This now means any businesses who were expected to put digital links in place last year must have this done by the rapidly approaching deadline of April 2021.
Added to this, from April 2022, all VAT-registered businesses will be expected to file their tax returns digitally regardless of their turnover - which was a limitation in the previous phase. For many businesses, this requires a substantial amount of work if the bookkeeping is done manually, on paper records or even not at all, adding to their already full plates as they look to rebuild following the on-going challenges borne from the pandemic last year.
Accountants naturally have a critical role to play in supporting businesses through this next phase of MTD. So, it’s important to have a clear understanding of what needs to be done right now and how to make the transition as simple as possible for clients.
Actions to take now to meet MTD
The first port of call is to evaluate all clients who must comply with MTD before the phase 2 deadline, and review the MTD template built for the first phase. This will help establish a clear strategy of what each client needs to do. Accountants should then begin the transition preparation - communicating with clients about their exact financial positioning, workflow, filing and how to approach switching to digital records.
The first port of call is to evaluate all clients who must comply with MTD before the phase 2 deadline, and review the MTD template built for the first phase.
This is where it is important for accountants to think smart as MTD is a volume play - in both clients and data - when it comes rolling out across a large portion of their client base. One tool that is incredibly valuable and available from software providers, including IRIS, is record digitisation which enables anyone who needs to track receipts, capture photos and digitally process receipts, invoices, purchase orders and bank statements. The physical data automatically becomes a digital record and uploaded to a cloud-based platform, ready for accountants to review and compile VAT returns as required in their process. Such automation tools dramatically increases client efficiency and process productivity, while making life less stressful for accountants and business owners.
Through automation, such systems eliminate the time-consuming everyday chores, ensuring accountants can act smart and get more done. The majority of small business owners end up spending their personal time compiling their records from the week (or month) and would love to get this time back thanks to automation tools. In return, time saved chasing and reconciling client data frees up accountants to focus on client relationships and higher-value advisory services. It also rapidly improves communication speeds, transforming how accountants engage and connect with clients and prospects, ultimately helping them to retain and attract new clients.
Once accountants have successfully evaluated and prepared their clients for MTD and established a clear, proactive plan of action, they then need to make sure all clients have registered for an HMRC Agent Services Account, although proactive accountants could do this ahead of client evaluation. Once this is done, certain HMRC online services, including the MTD, VAT and income tax pilots can be accessed so business owners and accountants can work together to manage the transition efficiently; making it as simple as possible for both parties involved.
By using technology to gain instant access to accurate, real-time data well ahead of this year’s MTD deadline, accountants and business owners can be sure they’re in the best position possible to move forward with confidence.
Future-proofing for challenges ahead
Every client is different and will have their own way of managing their tax - some will have been using paper-based processes for years on end. So, it’s important to frame MTD in a way that isn’t complicated or confusing. Given the rapid digitisation of UK businesses over the last year to survive - and in some cases thrive - during the pandemic, businesses are more likely to be open to a digital records conversation than ever before.
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Yes, the practical side of what’s required and expected with regards to MTD is essential to get right. But MTD is about more than mere compliance, it’s about looking to help future-proof businesses. This is a real opportunity to build relationships with clients on a personal level and move into that trusted advisory role.
Working with clients to lay out a clear roadmap of steps they should be taking ahead of the 2021 MTD deadline - as well as the April 2022 VAT rollout - will enable accountants to help their clients on a real-time basis. And ultimately be of more support to business owners looking to recuperate from the impact of the last year.
By digitising now and creating great efficiencies across the client’s business, accountants can take advantage of improved workflows, increasing productivity and working smarter and help their clients future-proof their business for good. Harnessing technology to streamline tax management and create a single view of the data for all financial records, means accountants will put their clients in the best position to move forward with confidence.
Finance Monthly hears from Wayne Parslow, Executive Vice President for EMEA at Validity, as he explores what the financial services sector stands to gain from better handling of its data.
Financial firms face an increasingly complex minefield of regulations when it comes to handling data. The sector has so many acronyms that it’s often difficult for a layperson to wrap their head around them. Unfortunately, finance companies don’t fare that much better, and can be overwhelmed by seemingly infinite customer data management requirements.
Whether it’s ensuring appropriate customer data storage under GDPR or securing payments processes under PSD2 and PCI-DSS, there’s a host of regulatory pressures for managing the financial customer relationship chain.
Regulatory bodies are certainly not toothless when it comes to enforcing punitive measures, either. At the end of 2020, the ICO issued fines to both OSL Financial Consultancy Limited and Pownall Marketing Limited for misusing personal data.
Data Management Difficulties
Ensuring data held by finance firms is accurate, up to date and, equally importantly, used appropriately is a shared goal for both the regulator and financial institutions. However, with the pressures put on financial firms by the pandemic, there’s a good chance that data management best practice has taken a back seat in favour of ensuring business continuity.
This is a misstep, as the two key fundamentals of data – data quality and data governance – should be tied into the basic operations of a financial services firm. With strong data foundations, financial services firms will be in a far stronger position to navigate the upcoming uncertainty of a post-pandemic world.
Ensuring data held by finance firms is accurate, up to date and, equally importantly, used appropriately is a shared goal for both the regulator and financial institutions.
Having data quality and governance work in concert to support one another does not simply ensure regulatory compliance, though. The value of data for driving successful business outcomes has already been proven, and businesses which employ a data-driven strategy are growing 30% year-on-year. Higher data quality also delivers stronger customer relationships and greater engagement.
Curating Quality
Data quality is not a once and done operation. For financial services in particular, it’s a complex, continuous network of processes and actions that must be continuously maintained as new data is collected, augmented and edited by the organisation.
First and foremost, a finance firm must take stock of the current state of its data. Given the rapid changes that have occurred over the past year, it’s essential to reassess data for accuracy, completeness, duplicates and inconsistencies. Firstly, data needs to be housed correctly so that it can be profiled accurately. Profiling their data enables financial organisations to ensure it is right for the business’s current needs, can be easily analysed and reported on, as well as being able to more easily check whether it is up to date.
Deduplication
A common barrier to data quality are duplicates. Many regulations require data to be up to date, and for customer data to be removed under certain circumstances (i.e. when a contract is terminated). Whilst a firm might believe it has done its due diligence under these circumstances, leaving duplicate data behind poses a significant compliance threat and risks inappropriate or even illegal communication. To have a consistent, complete view of its customer data, a financial firm must be proactive with the management of deduplication. It’s a simple yet effective process that can make a huge impact, but requires an investment in the appropriate tools.
Leaving duplicate data behind poses a significant compliance threat and risks inappropriate or even illegal communication.
Security and Enhancing Data
The end user is typically identified as the weakest link in the security chain, and many breaches reported to the ICO stem from simple user error, whereby an employee downloads a confidential document to a laptop which is then lost or stolen, for example.
With the move to remote working last year, many businesses wisely took the step to upskill their now remote workforces with additional security best practice training to help mitigate the additional cybersecurity risks.
Organisations can take additional steps to ensure errors that create vulnerabilities, such as the laptop example above. Employees will often adopt methods that help them get their jobs done most efficiently, even if these deviate from security best practice. Standardising data is a crucial step to enabling it to move through the organisation in the correct, and secure, way – regardless of location.
For example, if finance needs to produce reports based on the outgoings of a few different international teams, putting best practice standards in place as basic as how titles and regions are entered means this can be completed more efficiently, easily and securely across the board.
Alongside profiling, deduplication and process standardisation, verification needs to be a top priority, and should take place as data is collected. Using external sources, both prospect and existing client data should be verified (provided, of course, that consent has been given for these external sources to be used in this way). Enriching data in this way ensures finance firms get a better ROI from marketing and sales.
Adopting a Data Mindset
Data is constantly changing, and a continuous monitoring regime is the only way to keep track as it waxes and wanes. A simple way to keep up with the health of your data as it changes is to set up dashboards and alerts that track data quality automatically.
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That said, it’s not just about technology. There’s no getting away from it – a comprehensive cross-functional approach is needed to implement a successful data governance programme. For finance firms, team members must be subject matter experts who understand the complex industry standards and regulations and know what to do if they don’t. Many finance organisations will already have an executive level representative responsible for company-wide data management, such as Chief Data Officer (CDO).
A core aspect of a CDO’s responsibilities should be simplifying processes with the help of the right technologies. However, it’s unlikely there’s a single tool that will do everything a financial organisation needs, and every governance strategy should be bespoke for the organisation that will follow it. Companies should be aiming for a “data quality by design” mindset, where the checks and processes that ensure top-quality data is maintained become second nature.
