By Nick Felton, SVP, MHR Analytics

These are challenging times for the financial services industry, with a range of significant challenges such as Brexit and market uncertainty ensuring organisations operate with increasing levels of caution.

For many leaders in this sector, the ability to identify and neutralise problems before they have an impact is of paramount importance. What’s also important is having the confidence to make data-led decisions, on information that can be trusted.

Despite an obvious need for better data insights, investment in critical big data technologies like analytics is often overlooked.

Official figures suggest that organisations should do more to prepare for a period of uncertainty. Recently published data revealed that UK GDP rose just 0.1 per cent in the first three months of 2018, its slowest growth since Q4 2012. In addition, the Bank of England’s recently updated 2018 economic forecast of 1.4 per cent growth, down from 1.8 per cent is having an adverse effect on the economy.

The ongoing Brexit process is clearly an issue that’s high on the agenda for the financial services sector. Recent research from Deloitte polled chief financial officers and found Brexit to be their number one concern – something that is growing in every quarter. Although Brexit may provoke difficulties, a poll from Lloyds bank has found that 88 per cent of over 100 senior leaders said they believe the UK will continue to be the most prominent hub for financial services after the UK leaves the EU.

Big data as a topic is certainly something that won’t be going away anytime soon, but analytics is still not being utilised. Recent research has found that nearly half of UK businesses are now applying big data for insights into their organisation but only 30 per cent of them are extracting enough valuable information to put the data to good use. As well as this research, it has also been reported that spending into big data is expected to reach $58.9 billion by 2020. The rise in companies utilising their big data will be astronomical for adapting to digital transformation but they are likely to run into issues.

Navigating your way through growing volumes of big data is not easy, particularly in these uncertain times. Whilst it may be a positive that companies are attempting to tackle big data projects, they need to ensure they are utilising the information in order to effectively capture, store and analyse the findings. Business analytics can provide support in showing companies an insight into what their data currently means for their organisation, give an understanding into forecasting and manage resources for the future. Without harnessing the power of business analytics, companies – particularly banks are at risk of not successfully planning for the turbulent future and falling behind their competitors that are using this technology.

Implementing new technology has not been an easy road for banks and they are particularly struggling to implement artificial intelligence and data analytics, which are complex technologies that need to be deployed correctly. With customer demand for reliable online services increasing, banks are also coming under increasing pressure to support their own digital transformation initiatives to provide better customer service.

Resourcing has also been an issue for some time and will continue to be if organisations do not start to hire enough skilled IT talent needed for the future of the business and the technological needs. With the uncertain times ahead, it is now critical to have insight into what impact changes to staff, pay and their conditions will have on the workforce and future forecasting. As well as assisting with this, analytics systems can enable banks to plan their budgeting resources properly, with spending for the year ahead accurately forecast and adjusted around market changes. This flexibility is important for allowing a shift to coincide with the market conditions.

The new revised economic forecast is bound to have an adverse effect on the financial sector and the economy and now is not the time for the banking industry to be holding back on decision-making.

The government also needs to do more to raise awareness of the importance of data for decision-making and helping banks and financial services organisations prepare for potential turbulence following Brexit.

Nobody knows precisely what state the economy will be in next year, but what’s important is that action is taken now to optimise data assets and start using them to make truly informed decisions.