Since the financial crisis in 2008, the monetary impact of regulatory non-compliance has risen dramatically. Between 2008 and 2013, banks in the US paid more than $100 billion in penalties and settlements.
Tightening regulatory frameworks provide a telling illustration of why firms need to get to grips with data. New anti-terrorism and anti-money laundering legislation requires that financial institutions track customer data more closely and report suspicious activity, or risk attracting enormous legal fines. Despite this pressing need for strong data controls, the financial services industry still faces data management challenges, with institutions struggling with fragmentation, silos and a lack of clear governance processes.
A lack of robust control and coordination also affects financial services firms’ abilities to deliver their Big Data ambitions. 50% of financial services executives cite ineffective coordination of Big Data and analytics teams as the biggest challenge in Big Data implementation.
There is no doubt that financial services firms need robust data management to meet growing regulatory pressure. They also cannot let the Big Data prize pass them by. Our research shows that appointing a leader entrusted with enterprise-wide data responsibilities is critical. Across industries, organisations that have appointed a Chief Data Officer (CDO) report a 43% success rate for their Big Data initiatives, compared to 31% for organisations that have not appointed a CDO. So, where do financial services firms stand in terms of appointing CDOs? What is the role of the CDO in these organisations? To find the answers to these questions, we interviewed senior executives from leading global financial services firms to assess the maturity of the role of the Chief Data Officer in these firms. The assessment was based on a set of nearly 50 questions around data governance mechanisms, the roles and responsibilities of the CDO, and the alignment of the CDO organisation with business, IT and support functions.
In this paper, we outline how organisations can design a CDO role that fits with their stage of data evolution and which maps out how a CDO can help them achieve a step-change in their Big Data performance. In this way, Chief Data Officers will earn their place alongside CMOs, CFOs, and CIO colleagues in the enterprise C-suite.