If I said technology isn’t the most important part of your technology strategy you’d probably be surprised.
But it’s true. And it’s something I presented to a room of independent advisers from around the world earlier this month.
Successful digital transformations do not start with technology. They start with data. Trouble is, all too often, there’s a real absence of it.
It might seem an unusual problem to have when we live in a world where an unimaginable amount of data is being generated (by 2020 it’s predicted that 1.7MB of data will be created every second for every person on earth).
But data needs to exist and it needs to be trusted.
I recently asked a client: ‘How confident are you about what’s happening in your business?’ He has a manageable sized firm, you can put your arms around it.
He said: “We’ve got processes, people check boxes but I can’t hand on heart be completely sure.”
It can be an even bigger problem when your business is larger and you can’t put your arms around it.
Data holds the key to important insights into your business and your clients. It needs to be put at the heart of any transformation - to know where you are now, where you want to be, and where to focus.
The trouble is, most firms are still in a phase of data transition. From paper to digital and from unstructured to structured.
Increasing regulation and reputation risks have kept the business focus forced towards data protection and compliance (the things that must be done), leaving little opportunity to consider data for business efficiency and competitive advantage (the data advantage).
"Artificial Intelligence is the nirvana of data use but mystical for most businesses."
Having data advantage means being informed - for reporting, for insight, for automation, and for intelligence - all key parts of any successful transformation strategy. Businesses like Amazon, Google and Facebook have distinct data advantage because they have the volume of data that machines require to identify trends and learn.
Can you imagine what Amazon would do as an advice business? How much of it would be automated?
Artificial Intelligence (AI) is the nirvana of data use but, unless you’re already taking advantage of it, is mystical for most businesses. I prefer to think about this topic as ‘actionable analytics’. In other words, what is the data telling us that we can drive action from? What will allow people to do more, more quickly, and remove the grunt work?
"Multiple data sources and systems are still a major problem for most businesses."
It’s not about replacing people with machines - people are needed but for different things. Let computers book a hair appointment for you on the phone (the technology is already there) and allow people to be smarter with their time, focus on revenue-generating activities and add value to the business.
Multiple data sources and systems, plus inconsistent and incomplete data are a major problem for most businesses. It’s limiting what machines and algorithms can do. Unless you’ve got good data, you cannot automate or predict, and you can forget about AI.
As it stands, AI remains in the far distance for the majority of financial firms. First, businesses need to look beyond data protection and compliance, to data for business efficiency and competitive advantage. It begins by getting to an informed state; until then, you just won’t know.
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