The Evolving Role of the Chief Data Officer in Financial Services: The Swiss Perspective - Banking blog

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Organised mastery of data, analytics and the digital realm is quickly becoming an essential ingredient for the Financial Services industry success. The transformation of banks and insurers currently focused on bricks and mortar business to primary digital channels is well underway – a transformation that relies on effective use of data and analytics to drive operational actions and insights.

The data agenda is a core part of recent regulation such as BCBS 232 and numerous other directives and legal concerns. In response, financial institutions (FIs) worldwide have shaped the role of the Chief Data Officer (CDO). Swiss banks, particularly the ones most impacted by global regulation, have followed suit. Currently in Switzerland the extensive regulatory landscape and the legacy of data confidentiality and secrecy (particularly in banks) prevents them from fully embracing the strategic value of data and analytics as a value generating asset. The efforts of Swiss CDOs often remain focused on foundational activities concerning data governance and custody, while analytics efforts are developed in functional silos.

Our recent Deloitte report “The evolving role of the Chief Data Officer in Financial Services” provides Swiss CDOs and those responsible for data with a roadmap to evolve their role from marshal and steward to business strategist by building on lessons learned from the way FIs in other markets have evolved the CDO role.

The development of the Chief Data Officer role

In reaction to the 2008 global financial crisis, US FIs created the CDO in order to improve the effectiveness of data management to placate regulators. During the last three years more progressive organisations have extended this role, advocating the CDO as a leader in the use of big data and digital analytics, and more recently as a proactive business enabler combining analytics and emerging technologies to support innovation and strategy. Firms embracing data and analytics will intensify the integration of analytics into the way they do business during the next two years to become “Insight Driven Organisations”.

Most Swiss banks are still in the “hygiene factor” stage of evolving the CDO role - as a data custodian - prioritising topics such as business application ownership, data governance operationalisation, client reference data and data quality. Increased awareness of the digital and analytics opportunities among Swiss C-level is beginning to unlock funding for big data analytics pilots paving the way for this analytics transformation to occur.

The dimensions of the Chief Data Officer role

So what should the CDO do? The evolving CDO role requires playing in four capacities; operator, technologist, strategist and catalyst. In Swiss banks, the current CDO positions are, in most cases, playing the role of operator and/or technologist. They manage and govern data and technology policies to promote operational efficiency and assess and design data dictionaries/models and technical architectures. Less often do they have the opportunity to align business and data analytics strategies or to act as a catalyst for change and innovation. (That’s not to say analytic innovation isn’t happening but rather that it is built in lines of business or functions and governed, maybe enabled, by the CDO organisation. From our point of view the “governor” role is never the most life affirming…). In contrast CDOs in the United States, Canada, and some European markets, are assuming a central role in setting the direction. They work closely with the C-suite to create innovation, growth and cost reduction opportunities through strategic use and reuse of data and analytics.

The compilers of this report interviewed Deloitte Financial Services Industry Analytics and Information Management practitioners from across the industry with deep insight into the role of the CDO. Many of these practitioners have helped banks and insurers in setting up the CDO or CAO (Chief Analytics Officer) functions and supported them in evolving the capability over the last years. My colleagues and I (Nathan) have seen a wide variety of differing styles of CDOs working successfully in a variety of organisations.

Getting the right person

The profile of the individual is critical – in terms of background (requiring a mix of IT, data, analytics and C-level communication skills) and personality (enthusiasm about championing data as a strategic business asset, confident in disrupting the status-quo, and a cross functional collaborative attitude). For the Swiss FI, local specifics are also essential. Swiss FIs often hire internally; if internals are not available, banks should ensure that incoming external hire CDOs are paired with regulatory and legal counterparts to ensure awareness sensitive of the Swiss regulatory and legal landscape.

The future of the Chief Data Officer in Swiss Financial Institutions

It is clear that although many Swiss FIs have created a CDO position, the role is still in its infancy compared to other developed economies. In the United States, the focus of CDOs has already shifted to big data, cognitive analytics and the internet of things, creating, curating, analysing and acting on data as a strategic asset.

Swiss CDOs can use our report as a useful career guide – while they must abide by legislation, and be aware of the legacy of secrecy and security that firms are keen to uphold, they should develop the evolution roadmap of their CDO role into a more strategic capacity, including:

  • building strong C-suite relationships as an enabler
  • creating and enabling the vision to influence the firm’s technology and data strategy
  • continue emphasis as a strategic business enabler – growth, cost, risk, compliance
  • encouraging data aware, analytics driven decision making in all functions of the bank – becoming an “Insight Driven Organisation"

Once financial institutions embrace the Chief Data Officer as a business strategy enabler, they allow data to truly become an asset, and they open up to becoming an “Insight Driven Organisation”. Although this may seem a distant reality for financial institutions in Switzerland, FIs do already have the advantage of possessing comprehensive data, particularly when they own the primary banking relationship. CDOs can learn from firms worldwide who have already successfully created the role and generated value from it. If they follow suit, Swiss FI CDOs will see an enhancement from their current data governance and compliance position, to a more influential, strategic role, allowing them to access untapped opportunities to drive shareholder returns.

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Nathan Jones - Director, Consulting

Nathan is a Director in our Analytics and Information Management team in Zurich with a focus on transforming banks and insurers to use analytics to drive better business outcomes. Nathan has 18 years’ experience delivering transformational change in this field including experience in the technology, data, strategy and operating models for global banks and insurers. He leads Deloitte’s Insight Driven Organisation proposition for Switzerland and our EMEA Big Data Management community of practice.

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Patrick Fluri - Senior Consultant, Consulting

Patrick is a Senior Consultant at Deloitte’s Analytics and Information Management practice in Zurich where he focuses on Big Data analytics and data governance and target operating model implementation of Data Lake technologies mainly for Financial Services clients. He has four years’ experience in use case definition, business analysis, global data sourcing strategy, as well as data visualization. Patrick is also involved in the Insight Driven Organisation proposition and the EMEA Big Data community of practice.

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Elizabeth Pescud - Trainee, Consulting

Elizabeth is a Trainee based in Zurich. She is currently studying for her undergraduate degree in Business Management. She has experience in banking and insurance, and is particularly interested in the uses of Big Data in the financial industry. Her most recent project concerned the implementation of a data lake in a Swiss bank, and involved business requirements gathering, business case development and data sourcing.

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