Sharon Wood, Linktank Connect

Big data has become the buzzword of the day. However, it is how you serve your customers based on the actionable insights that you derive from the data that matters – and the benefits of getting the data right are potentially enormous.

The Business Application Research Center (BARC) has found that practices that have invested in data and analytical capabilities have increased revenues by an average 8% and reduced costs by 10%. There is no doubt that arriving to the point where you are getting the most out of your customer, product provider and other external data from third parties is no simple process – and, as such, it is likely to be the biggest challenge facing financial advisors in the future. The reduction in costs when you have to invest in technology to get there may seem counterintuitive. But it highlights the benefits of putting in place technology-enabled systems that ensure your data is integrated and operationally streamlined and effective.

In a recent webinar hosted by Cover Magazine, Linktank founder and director Jen McKay and The Data Company CEO Kali Bagary discussed how to tackle this challenge and why it worth the time and effort. Bagary warns that financial advisors that don’t get this right will fall behind. Those that do, he adds, will achieve a single source of truth for their customers that will enable them to receive actionable insights. “It’s not about what data exists but how to take action based on the insights achieved from the data.” The BARC research found that “good data” enabled 69% of organisations to make better strategic decisions, 54% to improve operational processes, 52% to gain enhanced customer insights and 47% cost reductions across the operations.

McKay discussed how far most financial advisors are from this desired state of data. Linktank advisor research has shown that 74% of the respondents use multiple software applications and 90% have no integration at all, with standalone systems and data manually captured in different systems. Operating effectively always comes down to managing the complexity of the flow of data through the business, she explains, and most practices are using one or two software systems in addition to Microsoft programmes, like Excel and Outlook. “Financial advisors maintain information in multiple places with no way of connecting them. Integration opportunities are available, but they are few and far between and it is costly to patch them.”

Bagary explains that using and taking advantage of the technology out there to help you give the right advice doesn’t need to be a scary prospect. “It’s a journey and doesn’t need to happen overnight. You can map out where you want to get to and break it down into chunks. That way you can make sure the process is cost-effective and repeatable.”

McKay paints a picture of what the ultimate result could be: a central administration hub that plugs in internal and external data sources that you can build once and use many times. It will give you a 360-degree view of the customer, with their information consolidated and clean. You can then create dashboards and visualisations of the data that are meaningful to you and your client.”

Bagary and McKay highlight that achieving the holy grail of a single source of truth of your clients is not as difficult or costly as you think. All it takes is recognizing the value in getting your data right and finding the right technology partner to get there.