This has been an active summer for technology giants acquiring data analytics startups. In June,
Google purchased Looker for $2.6 billion and
Salesforce bought Tableau for $15.3 billion.
They are among the largest deals either tech giant has made, and rumor has it Microsoft and IBM are looking to get in on the action as well to bolster their own analytics offerings.
These two acquisitions underscore how valuable data pipelines have become across major industries. But nowhere is data more heavily relied upon, nor is more data generated, than in the financial services sector. The compliance process itself generates massive amounts of data — and companies must figure out ways to manage it appropriately.
(More: Plaid buys data aggregation rival Quovo for $200 million)
Yet as good as these solutions are, to truly deliver at the point of impact, they still must be customized to meet the specific needs of vertical industries, including the highly regulated financial industry.
Data analytics and the future of financial services
Analytics companies that lack an understanding of the nuances in financial services — what data should be analyzed and how it should be parsed to avoid new complications or skewed results — may not know exactly what they're trying to find out and why.
For data analytics to have a positive impact on financial services, the business context must be considered at a granular level. Industry-specific data management capabilities must be integrated to guide or prompt users to ask the right questions, automatically run the right reports and receive input and recommendations that will help move the needle for the organization.
By combining the understanding of key levers with advanced artificial intelligence solutions, financial services firms can tap into data and uncover insights to function more strategically and efficiently. Learnings can be applied in ways that have been inconceivable previously.
(More: Financial firms need to standardize data so fintechs can build next-generation software)
Insurance and wealth management firms will be able to leverage advanced data analytics to improve client engagement. Advisers and account reps will have invaluable, actionable information about the preferences, needs and strategies of their customers that enable them to provide a higher level of service.
New technologies can also streamline tedious manual tasks so that advisers and agents don't spend countless hours trying to find or enter information. Smart triggers can alert representatives of potential issues before they escalate, effectively reducing the number of policy lapses or clients dropped. Data analytics solutions built for the financial services industry can also do things like focus on the behaviors that influence sales — from both the client side and that of the account representative.
Who will dictate your data strategy?
Every business needs a data and analytics strategy, and many companies will push to be a part of yours. But don't be blinded by big promises. Instead, look at the business value you expect to achieve. Choose the partners and solutions that best tie to achieving those outcomes.
In particular, financial services organizations need to consider the hurdles posed by adherence to strict regulations. Compliance features can't just be tacked onto a solution as an afterthought.
Fintech companies that understand the complexities of the industry and can integrate with larger providers represent the best possibilities for the future. The resulting next-level insights will propel businesses forward as a personalized and more human experience pairs with the best of what technology can automate and optimize.
It's a pivotal moment for analytics. As intuition is replaced by information, the impact of today's decisions will set the course for tomorrow's outcomes.
Donna Prlich is chief business officer and general manager of social at Hearsay Systems.
