If the central role that data plays in modern life wasn’t already evident – from driving the algorithms that produce our Spotify playlists to helping businesses understand their customers and make decisions of all kinds – the current crisis has certainly made it clear. Tracking the spread of the coronavirus and developing treatments, and ultimately a vaccine, depend on the collection and analysis of vast amounts of data from around the world.
“COVID has put a spotlight on data,” according to Cara Dailey, Chief Data Officer at Silicon Valley Bank. “If you listen to our politicians, if you listen to what's happening in the world, everyone is looking at data and holding our breath.”
Dailey was speaking during a recent webinar that brought together top data executives to discuss the evolution of the role of chief data officers and data governance in financial services over the last decade. The webinar was presented by the EDM Council, a global association that champions the practice of data management as a business priority.
Inevitably, talk turned to the current crisis and how it has highlighted the importance of data and data-driven decision making, particularly in medicine and science but in many other spheres as well.
“When I hear [New York Governor] Andrew Cuomo say a decision on reopening is going to be data-driven, I think, ‘there we go,’” Peter Serenita, Senior Vice President and Chief Data Officer at Scotiabank, said during the webinar. “All these decisions are being based on data and no longer on gut feels. That was a traditional financial services reaction, ‘I will do this because I have experienced people, they know the market.’ We are moving to a data-driven world and that certainly includes financial services as well.”
Srinivasan Sankar, Chief Data and Analytics Officer, Hanover Insurance Group, said the crisis has also demonstrated how the tools used to capture and distill data allow for much more agility than they once did. He cited the example of a 17-year-old American high school student who, in the early days of the pandemic, used his coding skills to build a website that collects data on the virus from around the world, cross-checking it against official sources, and presents it in an easily understood form. In the past, such a project would have taken months.
“A crisis will automatically give us that agility to immediately respond and then move on,” Sankar said on the webcast.
The start of the era of advanced data management that led to that current phase of agility goes back to the early 2000s, said Peter Ku, Vice President and Chief Strategist at Informatica, who moderated the webcast. In 2002, just 12% of Fortune 1000 companies had a Chief Data Officer, he said. Today, that number is 68%, and in financial services it’s above 90%. And the users of data are no longer in back-office IT, but are deeply integrated with their businesses and driving business decisions.
“We're going to continue to see new forms of data proliferate, data that includes intelligence assets that we can then leverage in order to drive business success,” Ku said.
John Bottega, President of the EDM Council and former CDO at Bank of America, broke down the evolution into three “tranches.” The first, in the period after the 9/11 attacks, focused on tracking data from the perspective of Know Your Customer and Anti-Money Laundering, and on cost-cutting and efficiency. The second, after the 2008 financial crisis, was a “defensive” period, when the focus was on managing the many layers of regulation, compliance and risk controls put in place to avert a repeat of that crisis.
In the third, and current, tranche he called “offensive” data management, the rise of artificial intelligence and machine learning has opened vast new opportunities for what can be done with data.
Which brings us back to the pandemic.
“I think that this crisis, similar to the financial crisis, is elevating the role of the data professional,” Bottega said. “We see this constantly with the data coming back from the different parts of the world around COVID… data is now being recognized as a critical asset that enlightens us, that gives us insights into what's going on.”
The panelists agreed that the current crisis has refocused attention on digital transformations and the need to manage and use data effectively as a central part of their business operations, and in some cases it has changed immediate priorities. But Serenita says the full integration of data into the business was already well underway at Scotiabank.
“The evolution of this [crisis] certainly has changed internally the priorities of what we're working on, but I think it also reaffirmed the commitment we made to data and analytics,” he said. “We combined the data and analytics functions and moved them into the businesses, so we've been able to stay completely aligned and be much more agile and more important to the business strategy itself.”