Effectively harnessing the power of data can be a daunting journey but it is a necessity in today’s highly competitive environment. Firms today are looking to use data more than ever before to help make informed decisions and gain profound insight into markets that are marked by rapid disruption.
How is the C-suite adapting? Some 60 percent of CEOs say they are concerned that their internal processes may not withstand the kind of disruption impacting their market sectors1. As C-suite executives look to embrace digital solutions, they must also be prepared to tackle the siloed approach that may be prevalent within their firms in order to corral and leverage digital assets across departmental boundaries. This can be a challenging undertaking.
Jamie Stevenson, Managing Director, Global Head of Product Management, Data & Analytics at RBC Investor & Treasury Services, spoke with Shreeshant Dabir, Partner, National Leader, AI and Intelligent Automation at KPMG, and asked about the headwinds faced by firms as they strive to optimize their data strategies.
JS: How has data evolved to become so essential to firms today?
Jamie Stevenson
Managing Director,
Global Head of Product Management,
Data & Analytics, RBC I&TS
SD: Leveraging data is critical for firms today given we have become a culture that now places a high value on ‘intangibles’. For example, banks were traditionally associated with structures and places that held and protected your money. Stone buildings with big pillars and imposing walls that projected trust and security.
But banks no longer hold cash in vaults nor do they move that physical asset around at the same scale. In its place, data has become the asset that needs to be managed and protected. As a result, the concept of trust has evolved from that prior association with tangibles to virtual elements represented by data. That’s the gold. Data and the analytics derived from that data are intrinsic and valuable assets.
JS: How can asset managers deal with growing concerns over managing and protecting data?
SD: Without a doubt, firms must manage data with the utmost care and responsibility. The potential reputational and financial risks associated with misuse can be significant. That sense of ownership and accountability for data, including how the data gets used, has to manifest itself across the organization, from the technology that gets built to the people who use and manage the data.
We cannot underestimate the value of our human resources as data guardians. While companies may have sound policies and technological checks and balances in place, it is also incumbent on people within the organization to respect and understand the value of that data and play an active role in preventing its misuse.
JS: Managing data has been likened to a long journey. Are we there yet?
Shreeshant Dabir
Partner, National Leader,
AI & Intelligent Automation, KPMG
SD: The financial crisis of 2008 and 2009 brought the issue of data management to the forefront, and highlighted the insufficiency of data control mechanisms at that time. It became clear during this period that investors were not fully aware of the positions they had taken, nor did they have clarity on their assets and liabilities. The sweeping regulatory response that followed drove companies to build stronger and more comprehensive data management processes that focused on greater transparency and investor protection.
The data journey continues and progress is being made. Organizations are now creating roles such as chief data officer, setting up data governance frameworks, and instituting programs where governance is a tier-one priority. That is all good news, but there is still work to be done to ensure the appropriate structures and resources are put in place. The velocity of change is accelerating and staying competitive means embracing and investing in digital technologies.
JS: How does the silo mentality impact an organization’s ability to develop effective data management systems?
SD: I believe that silos are an unintended consequence of the drive to achieve organizational efficiency – for example, it was more efficient to group people that worked in the same line of business into a department. That certainly made sense when commonality of people capability drove capacity efficiency and growth, but systems are now automating many functions that were done by human hands. That human centric organizational concept of hierarchy and assimilation is no longer an appropriate model. Today’s world is evolving and data knows no boundaries.
As technology solutions are increasingly being used to augment what humans do, siloed vertical operations need to become horizontal. Cutting across those silos requires greater collaboration and can reveal pockets of data or insights that may have broader applicability and value across a firm. It’s acknowledging that the data or systems you are responsible for may be beneficial to others. The business imperative to change needs to transcend borders and business silos.
JS: Can we expect more government oversight over how companies manage data?
SD: Data stewardship rests with governments, firms, and individuals yet the roles and responsibilities are not clear. The lines are blurred between what can be considered uniquely yours versus what belongs to someone else. Consider that Facebook photo or social post and how it can be consumed and shared. We all want to be assured that our data is safe and protected and there is growing pressure to ensure that rules are in place to help support those efforts. Companies are very aware of this. KPMG is collaborating with several organizations to develop a framework that allows enterprises to be self-governing and aware of the good and the potential risks across the data continuum – from data management and automation to advanced techniques harnessing the power of algorithms.
The government plays an essential role in setting the ground rules on how private firms manage and govern their data assets. Canada, for example, introduced the Digital Charter, which includes the responsible use of artificial intelligence. We are also seeing corporate information managers step up to deal with digital disruption to ensure that new technology models are developed and deployed appropriately.
JS: How are advances in data-driven technology changing the way companies handle information?
SD: Data-driven technologies are enabling companies to be more agile in adapting to their clients’ needs and to be more operationally efficient. This changing competitive landscape requires the provision of more timely, relevant, and customized products and services.
To enable these business capabilities, which are primarily based on digital value creation, organizations must establish data-first design principles. This includes how they store and manage structured and unstructured data, from internal and external sources and continuous and instantaneous data streams.