As we discussed in our previous blog post, banks and credit unions now have access to more data than ever which can be used to make strategic business decisions. However, it is not uncommon for financial institutions to miss the opportunity to take advantage of their data due to a lack of the right mindset.
Having a data informed mindset is essential and means that you are using data as an important component to be taken into consideration during the decision-making process. The big question is, what steps do you take to adopt a data informed mindset? In this blog post we will discuss best practices and important factors that will help you and your team adopt and embrace a data informed mindset successfully.
One of the best practices we always give to our clients is to collect and analyze data from various sources. Analyzing multiple sources of data helps you learn to recognize and identify patterns and correlation within a data set. In addition, Deloitte released a study with five additional factors that will help you drive successful data initiatives for your financial institution:
1. Strategy
Before undertaking any new initiative, it is important to understand why you’re doing it in the first place. What are you trying to accomplish? Are you trying to develop a centralized ordering system to manage currency, or are you trying to understand your currency usage down to the denomination? Remember, the success of any data project is tightly aligned with a clear and robust strategy and distinct measurable KPIs from the very beginning.
2. People
To truly adopt a data informed approach, you need to empower your people to embrace a data informed mindset. People need to work well with cross-functional departments involving cash to ensure the data is being analyzed per department as well as holistically.
3. Process
Often, data is poorly managed, and roles are undefined in the overall process. Invest in processes that do more than just collect data. The data collected should be leveraged for actionable intelligence - only then can you make sound strategic business decisions based on your findings.
4. Data
Be critical of the data your financial institution collects and accepts. This includes everything from the relevance of the data and the source it is taken from. For example, if the cash management team is solving for usage, that does not mean what the branch currency difference yesterday minus today. True usage needs to be solved for by denomination, but also includes orders and deposits.
5. Technology
Cloud software applications make collecting and using data intelligently more accessible for everyone, but before you undergo adopting one of these applications, it is important to make sure you have the right technology, skills or training available to make it a success.
By being data informed you will have more opportunities to increase profitability and revenue, optimize your processes and operations, minimize risk, and increase departmental collaboration. Many departments in banks and credit unions operate in silos as it relates to cash management, but by using these five factors, you’ll be well on your way to getting all stakeholders involved in your cash supply chain on the same page.
To learn more about adopting a data informed mindset, be sure to download Part 1 of our new e-book, “Supply Chain Management 101 for Financial Institutions.”
