Banks Still Struggle with Data Management — Capco Survey
Bank CIOs revealed have “first-rate” information management programs, while others are surviving and some could be on the brink of failure, according to a survey commissioned by consulting firm Capco, that was released today.
The in-depth survey of 21 U.S. bank chief information officers and technology executives, conducted this spring, which was researched and written by The Banker magazine, showed there is a high degree of variance in how bank CIOs assess the effectiveness of managing their data.
Only 19 percent or a minority of the banks described their IM program as “thriving,” while two-thirds said it was just surviving and 14 percent described it as stumbling.
Yet, managing data is crucial to any bank’s operations and could have a bearing on its profit and loss account, as well as providing timely and accurate information for making decisions, risk management and meeting regulatory compliance obligations.
Mohit Sahgal, Capco Partner, North American Technology Practice, who was part of the IM initiative team that developed and analyzed the survey, said he was not surprised by the results. “It was very consistent with how we see the market today.” According to Sahgal, many banks struggle in getting results from their IM programs. “What the survey showed is that the industry is relatively immature, that banks still struggle with managing these types of programs and with identifying the right sorts of performance measures,” he said. “The reason IM programs exist is to make money and establish programs that deliver insights into operations to know whether or not they are achieving their business objectives. This shows that programs that do that are still maturing. They are not as well formed as they could or should be,” said Sahgal in the interview yesterday, prior to the survey’s release.
In the report “The data challenge: is your information management program thriving, surviving…or stumbling?
On value, nearly half (48 percent) agreed that the bank extracts maximum value from the information it holds and uses it to compete effectively. However, one third agreed or strongly agreed that they do not extract maximum value from their data. Those who were not extracting enough commercial value from their data indicated that “No single version of truth or too many data silos” was seen as the biggest obstacle by 59 percent in this group. Others (47 percent) pointed to "ineffective integration and analysis of unstructured data," "insufficient automation or too many manual interdependencies (47 percent)," lack of analytical capabilities" (47 percent) and "lack of accountability or stewardship" (35 percent), as among the reasons.
As for length of time that banks had IM programs in place, nearly half of the IM programs are less than five years old, which means they are immature, the survey found. But a third have had IM programs in place for five- to-10 years and nearly a quarter have had them for more than 15 years.
Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio
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