Valerie Wiggett, Operations Manager, CaseWare Africa, reveals the three laws of data
“Data—or rather the ability to use it intelligently—is redefining business, and the financial services sector is no exception.”
The ultimate winners in the data economy will be those companies that know what data they are collecting, and can use it to differentiate themselves. Business is undergoing a data revolution. Increasing digitalisation of everything from business processes to social life is creating a tsunami of data. Whereas once the challenge was where to store it, the question now is who can use it effectively to differentiate themselves and show competitors a clean pair of heels?
The winners will those who understand the three laws of data:
1.Use data responsibly
It must be used responsibly in line with the law. Perhaps the most valuable data pertains to customers themselves: names, addresses, credit and buying history, preferences and so on. Much of this information is, however, highly personal and is increasingly protected by law—the Protection of Personal Information (PoPI) Act is the main legal framework in this country.
The key principle here is that consumers must know why their data is being collected, and it can only be used for that purpose. Using data irregularly is punishable with heavy fines in many jurisdictions, and will be here just as soon as the Information Regulator publishes the necessary regulations under PoPI. We have already seen huge fines imposed for data breaches in Europe and the United States.
2. Clean and accurate!
It must be clean and accurate. It’s obviously important that this customer data should be accurate. The old axiom garbage in, garbage out has never been more relevant. Technology is helping here because, increasingly, manual inputting of data is steadily being replaced as business processes are automated, reducing errors and creating information stores that can be used across the entire business.
Automation is transforming the financial services sector by ensuring not only that manual data input (and associated errors) are all but eliminated, and data can be shared across systems.
3. Use Intelligently
It must be used intelligently. Unsurprisingly, this is the most difficult to get right. There are two parts to this, perhaps they could be categorised as the front end and the back end. At the front end, the company uses customers’ personal data to create accurate marketing, and highly personalised customer experiences that result in a sale and ongoing loyalty. But at the back end, it has to use the full data set to improve its business processes and to deliver the front end.
At the back end, effective data use can impact a business’s ability to outperform competitors and thus ultimately its profitability. In the financial services sector, for example, XBRL business reporting and the new IFRS standards are all dependent on digitalisation and data. Initiatives like this include forecasting accuracy and better cash projections which are based on facts rather than intuition, as well predictions on customer and operational performance. Accurate financial modelling, as well analysis of payment behaviour, support better planning.
In auditing also, automation and efficient use of data enables the identification of anomalous transactions in real time, greatly reducing the burden on auditors while enhancing the service they offer to clients.
One of the biggest challenges is the sheer volume of data. Firms hold huge and increasing amounts of data, but typically only use between 3 and 5 percent of it. Clearly, those that are able to identify the best and most useful data will be at a huge advantage. Data scientists are becoming some of the most sought-after employees, and are in short supply. Ambitious companies with an eye on the future will be making plans now to ensure they have access to specialised data skills.
“Differentiate your business in a crowded marketplace”
Where the data revolution will take us nobody can be quite sure, but one thing is certain: you need to be thinking hard about what data you are collecting and how you are using it to differentiate your company.
Valerie joined CaseWare Africa in 2014. She is an MBA graduate with over twenty years’ experience in multiple industries, including manufacturing, construction and technology. Valerie’s roles have been mostly in sales operations and administration and she has worked in South Africa and internationally in the UK, UAE and Japan. She was appointed as Divisional Operations Manager for CaseWare in July 2018.