The evolving role of the in financial services: From marshal and steward to business strategist The evolving role of the chief data officer in financial services | From marshal and steward to business strategist

The evolving role of the chief data officer in financial services: From marshal and steward to business strategist

Over the past few years, financial institutions core businesses, products, customers, and (FIs) have increasingly come to recognize supporting data infrastructure’s capabilities that their data assets represent highly and needs. strategic sources of insight and leverage for a wide array of business functions, More recently, the CDO’s job description–for including risk , regulatory the most progressive organizations–has compliance, sales and marketing, product evolved from its initial focus on data asset development, and operational performance, gathering, , and stewardship among others. To realize this embedded to proactive business enablement, with value, however, organizations need to many institutions even marrying the CDO proactively and effectively manage their and (CAO) roles into a information assets at the enterprise level. In single senior-level position. This is especially response, they have been appointing chief true for organizations that aggressively data officers (CDOs) to provide required seek to leverage data science and advanced strategic guidance and execution support, analytical modelling to generate new insights and also to assure access to and the into the markets and customers they serve, quality of critical data. In addition, CDOs the products they build and price, the risks will undoubtedly play a strategic role in they assume or pass on, and the means by helping FIs adapt and transform their data which they operate the business to benefit ecosystems in response to rapid technology stakeholders. Organizations today need innovation in digital, mobile payments, Big senior leaders to not only manage and , advanced analytics, govern the data, but also to leverage the blockchain, robotics, cognitive learning, data using emerging technologies that can and automation. This report explores the generate actionable analytical insights and evolving role of CDOs in the global FSI–from tangible business benefits. senior data marshal and steward to strategic business-enablement leader and innovator. For most FIs, a huge amount of work in the data space remains to be done–especially Wanted: Executives to protect and in the face of new and emerging technology create value from data assets innovations, and regulatory changes around One might argue that the role of CDO really data reporting and data privacy, for which came into vogue in the aftermath of the traditional management strategies and 2008 global financial crisis. The need was approaches may be less than well-suited. In clear: Too little attention had been paid by view of such external forces and dimensions, most institutions to their data, which, some the role of the CDO in financial services believe, if managed more effectively, might should continue to expand in both influence have provided an advance warning of the and value. This is particularly important forthcoming meltdown–or, at a minimum, as corporate boards and executive teams a more resilient response. A senior, C-level increasingly appreciate the need for–and executive was needed to marshal and empower and fund–transformation of govern critical data assets–someone with a their businesses into information-centric, balanced understanding of the institution’s analytics-driven, and agile data consumers.

02 The evolving role of the chief data officer in financial services | From marshal and steward to business strategist

CIO, CDO, CAO…what’s the difference today? A cursory examination of a typical FI organizational chart reveals the existence of numerous, data-centric or sensitive C-level positions as shown in Figure 1. So, it’s important to know how these roles differ from the CDO position.

Figure 1—Overview of data-driven roles What’s the difference

Chief Information Officer Chief Data Officer Chief Analytics Officer

Technologist Scientist Innovator Strategist

What they do: What they do: What they do: What they do: • Focus on building an inter- • Lead the data and analytics • Deliver in-depth insights • Assess the most connected technology agenda of an organization into the end-to–end appropriate operating ecosystem by assessing journeys of customers, model and data • Establish and deliver and mapping the linkages supply chains, employees monetization approach for technologies, tools, between different arms of and how they can be the business the business approaches and improved using digital methodologies to unlock technology • Define and drive the • Assess and invest in the value in enterprise data enterprise-wide analytics enterprise-wide platforms assets of an organization • Have a strong vision across strategy, and licences, such as understanding of how to people, process, data and • Manage data as a strategic visualization tools migrate traditional technology asset and operationalize processes and systems to • Control complex multi- data governance, data cater for mobility, social • Be heavily involved in the sourced vendor quality and other controls media, sensors and so forth business transformation, environments, mitigate SLA to sustain the integrity of change and education failures, outage risks and the data of an organization • Have a natural leaning needed to embed analytics optimize services toward innovation and into the culture to become • Serve as trusted partner to development, including the insight-driven • Redefine IT by working key business executives ability to teach and inspire closely with other CxOs to focused on the customer, other stakeholders in the • Remain at the cutting edge embed scalable technology enterprise risk organization of data developments and into all approaches management, regulatory risks and drive future compliance and finance • Able to take the insight programs for the organization on a digital organization • Fosters innovation transformative journey both leveraging emerging Big internally and externally Data and analytics technologies

03 The evolving role of the chief data officer in financial services | From marshal and steward to business strategist

CDO holds the keys to unlock value regularly educating and updating the rest of Data–of all shapes, formats and types–has the organization, beginning with the board quickly become the FI’s most strategic asset; of directors and fellow C-suite executives, one that continues to grow exponentially and working down the chain of command. in volume, variety and complexity. Just like other crucial corporate holdings, data Major influencers: Industry, market, requires appropriate levels of stewardship and organizational maturity and governance to ensure that its Today, more than 25 percent of Fortune underlying value can be understood and 500 companies maintain a CDO position. realized. The CDO is the executive who Typically, these data leaders serve their holds the keys to help an organization both organizations across one or more of protect and unlock the full value of its data four key dimensions, as identified in assets. Figure 2–Catalyst, strategist, technologist and/or operator. That said, however, it The CDO builds and oversees a data should be acknowledged that multiple strategy and set of competencies that work factors–including industry, market in concert to enable information sharing, and organizational maturity–may collaboration, compliance and security, and strongly influence a given CDO’s specific efficient resource management to support responsibilities, reach, and impact. such critical stakeholder objectives as:

•• Growing and sustaining revenue Figure 2—The CDO typically has a focus across one to four key dimensions •• Selling the right solution to the right customer and maximizing profits Four faces of the CDO Focus areas

•• Enhancing operational efficiency and Seeks to instigate innovation •• Innovation •• Change through explotation of data and management reducing associated costs •• Reengineering analytics •• Stakeholder •• Enhancing Catalyst •• management •• Reducing fraud Partners with the business to •• Strategy •• Regulatory •• Improving regulatory compliance align business and data analytics development planning strategies to maximize the value of •• Demand •• Risk management •• Enabling new business strategies and data and analytics investments management innovation. •• Value management •• Portfolio Strategist management The CDO takes an enterprise view of data, building bridges and knocking down walls as Assesses technologies and design •• Architecture •• Solution delivery needed to enable data to flow expediently data and technical architectures to •• Technology partners •• Technology across departments and functions for better increase business aglity and governance consumption and leverage. In addition, manage complexity •• Delivery management •• Security and more than ever the CDO is the ambassador Technologist controls for the vision, business value, and resulting benefits of effective data management. Defines, manages and governs data •• Data governance •• Shared services and technology policies/programs The importance of this communication •• •• Sourcing responsibility cannot be understated. We and operations to promote and control operational efficiency and •• Operational •• Financial have observed CDOs spending much of performance management their time–especially in the early days– Operator effectiveness

04 The evolving role of the chief data officer in financial services | From marshal and steward to business strategist

Industry influence and has considerable exposure and risk In general, within the global financial around data use (e.g., clinical trial data, services industry (FSI), the banking and patient data, product development data, securities sectors are the most mature when etc.). Many LSHC players employ a CDO to it comes to instantiating and leveraging mitigate such risks and, concurrently, reap the CDO position. For example, in banking regulatory compliance and direct business the CDO position was initially created, in benefits. Similarly, a CDO in a consumer large part, to address data governance products company often collaborates and data quality challenges in response to with the CAO and ever-increasing business user complaints. to maximize the use of data assets in The role gained further importance as generating insights to enhance customer industry regulatory mandates such as Basel retention, acquire new accounts and drive II and then Basel III spelled out in greater overall revenue growth. detail specific levels of data management transparency that banks (and their CDOs) Regardless of the individual corporate were compelled to deliver. In many banks drivers, we see a common reliance on the today, the CDO’s primary responsibilities CDO role across all industries to assure remain focused on regulatory compliance the integrity and readiness of information and in operationalizing regulatory mandates, for internal business users, and enable the such as BCBS 239 (principles for effective realization of critical, externally focused risk data aggregation and risk reporting) ; business objectives. for the larger players, however, there also is growing awareness of the position’s Market influence potentially broader benefits as an enabler of Geographic market considerations also have business insights, strategies, and innovation. impacted both the adoption and evolution of the CDO position, often independent of On the insurance side of the equation, industry considerations. For example: appointing CDOs has been a much more •• In the United States, the CDO role protracted exercise. Today, most of the originated to help inventory and improve largest P&C companies have a defined the quality and availability of data assets. CDO or data leadership position in place, Over the past few years, however, US- together with some form of a supporting based FIs–especially the largest banks and data governance organization. Yet, while securities firms–have shifted the CDO’s some P&C players are perhaps more mature focus toward enabling business strategy in their messaging and capabilities, most by leveraging Big Data to drive actionable, still link the CDO role to an IT or operational analytical insight-generation. agenda which, frankly, may limit its overall business value. L&H firms, on the other •• In Europe, the earliest banking CDOs hand, are more slowly embracing the need were chartered with organizing and for a CDO position, again typically as an overseeing data elements needed to adjunct IT leadership position. meet Basel II/III and other regulatory compliance mandates. Insurance For FIs interested in potential industry companies, meanwhile, appointed “heads models for the CDO function outside of of” data compliance to manage Solvency financial services, life sciences and health II reporting demands. But now that care (LSHC) is probably farthest along the executives’ understanding is more mature, maturity spectrum. Similar to financial both banking and insurance organizations services, the LSHC sector is highly regulated are moving toward a more fully fledged

05 The evolving role of the chief data officer in financial services | From marshal and steward to business strategist

CDO role that combines data management create multi-dimensional and multi-tiered and architecture, governance, and CDO infrastructures that include functional, analytics, with a number of large players regional, and shared service-focused data already having significant programs in leadership roles under a single global data place. leader. For example, select global banks have already established CDO organizational •• Alternatively, in the Canadian market, structures that consist of a group level CDO adoption of the CDO position first evolved function, individual regional CDO functions, as a direct response to the demands separate line of business CDO functions and of that country’s FSI regulator for two CDO roles to support key global corporate prominent Canadian banks that had functions such as HR, finance, and risk. significant US operations to each establish a CDO function. These banks now field Organization influence well developed CDO-led organizations, Organizational maturity also has been which they continue to “fine tune” to shown to impact the CDO’s evolutionary enable benefit realization across their journey–different types of financial services respective enterprises. firms simply move at different speeds. If, for •• In Australia, on the other hand, the FSI example, an organization has just appointed regulator’s ongoing focus on data risk a CDO, the initial focus of the role is likely management across the sector has driven to be securing adequate departmental the CDO role to gain more prominence resources (budget and employees) and in larger institutions. Although risk and establishing a basic data management regulation priorities are a key component organization supported by a set of of the CDO mandate, many CDOs in the foundational processes and policies. These Australian market are also now driving a are essential stepping stones to enable the value-creation agenda, with increasing entire enterprise to leverage data assets focus on the use of data as part of a wider and drive business transformation. The new business and technology transformation. CDO also should build a business case for value-adding data services that are enabled •• Finally, in Latin America, the CDO role is in by the new foundational processes and the earliest stages of maturity–a concept policies. In addition, the CDO can educate being explored by many organizations senior leadership about the FI’s current across the banking and insurance sectors, capabilities and the strategic potential of but thus far only implemented by a few analytics–in short; sell the vision and the larger institutions in more mature financial business case to “make it happen.” markets such as Brazil and Colombia. For those institutions that have taken action, Overseeing data-related regulatory most have positioned the role within the IT compliance typically is the next rung up department. on the CDO evolutionary ladder. To fulfil its regulatory reporting duties, a FI wants One additional observation worth and needs a CDO to help the organization mentioning: financial organizations– understand what data it has and what particularly banks–that maintain a global condition it is in, how to manage it in a footprint appear to have a much more consistent manner to remediate and mature view of the CDO role than those assure ongoing reliability, and how to operating in single geographic markets. rationalize multiple copies of data to enable Given their size, complexity, local versus one version of the truth. And, while most enterprise remits, and other special CDOs retain significant compliance-driven requirements and needs, the former often responsibilities, increasing numbers of 06 The evolving role of the chief data officer in financial services | From marshal and steward to business strategist

FIs are looking beyond compliance for engines)—How can the CDO enable a opportunities to exploit the value of data for strategy that simplifies, integrates and competitive advantage. The desire of these enhances an organization’s ability to entities (especially in insurance and retail leverage its data assets by marrying banking) to make greater use of diverse technology innovation with existing data types of data (i.e., structured, unstructured, management platforms and capabilities internal, external, etc.) to generate business (e.g., warehouses, value is indicative of their sufficient maturity solutions, campaign management tools) to recognize that data is a strategic asset that have evolved over many years and and that the CDO must be appropriately with significant investment? empowered and supported to serve as •• Development of intelligent, machine- its designated “parent.” Considering, for based analytics solutions (e.g., cognitive) example, the myriad places where customer that can execute and interpret data- data alone touches the enterprise, the need intensive processes to generate new to institutionalize the management of that insights—What is the role of the CDO in data is overwhelmingly clear. responding to and/or leveraging these innovations and trends? Making the leap from to business strategist •• New sources of data—How can the CDO To elevate the CDO’s role from data steward extract synergies from new sources of to business strategist requires that both data (internal and external, structured the FI and CDO adopt an entrepreneurial, and unstructured) and supporting disruptive and innovation mind-set that technologies to derive business insights will challenge and extend existing business that were not previously possible? models, and identify and enable new ones. What factors might drive this transformation As market drivers proliferate and data and make the CDO an organization’s most increases in complexity, volume, and critical change agent or resource? strategic importance, the CDO’s role is expected to evolve into that of a Some key factors include: transformational leader and innovator–the executive who can guide an organization •• Proliferation of new market entrants— along a journey that enables it to be truly How can FIs counter or partner with information-centric, analytics-driven and non-traditional market disruptors–such as agile in leveraging all available information financial technology (FinTech) companies assets to make better business decisions, or mass-market retail businesses that sell better manage risk and be more responsive credit cards, insurance and other financial to the customers and markets it serves. products–who threaten to disintermediate However, the timing has to be right. There traditional financial services providers? needs to be a catalyst to create the spark– •• Emergence of lower-cost, digital-only perhaps a burning issue or opportunity competitors—How can enhanced data supported by an innovative and insightful capabilities help FIs improve the customer board-level executive, who can envision experience, increase loyalty and retention, the CDO’s ultimate value and is willing to and reduce the overall cost to serve? aggressively advocate for the role and create momentum around both essential and •• Advent of technology and tool strategic data management. innovations (e.g., Big Data, sensor- based and robotic solutions, real-time

07 The evolving role of the chief data officer in financial services | From marshal and steward to business strategist

Finding the “right” CDO The mature CDO-led organization is one The CDO CV that aggressively represents and enables the data management and insight- Effective CDO candidates in the FSI present impressive curricula vitae (CVs) that generation needs of all critical business showcase their ability to combine technology, business, and management acumen functions–including finance, risk, marketing, to deliver tangible enterprise value. Examples of sought-after skills and sales, compliance, product development, qualifications may include: human resources, shared services and • Domain experience. Institutionalized knowledge of the FSI (or a specific individual lines of business. To do so, it is sub-sector), including a thorough understanding of critical operations, critical that the CDO “has a seat at the table” customer interactions, and other external and internal stakeholder together with other senior executives, who expectations and needs. lead the businesses and functions that the • IT background. Demonstrated information management (IM) and quantitative CDO must serve. However, to sit at that skills–including working knowledge of IT infrastructure, various technologies/ table as an equal, the CDO must possess platforms, and aligned vendor solutions and the capabilities they bring–as well certain requisite business, technology and as experience leading major IM programs in key business areas. management skills and experience that • Quantitative mind set. Ability to develop a business case and performance often are not found in one individual. This metrics to secure program funding/resources and to measure business value. can present a serious challenge for both the • Business perspective. Expertise at the intersection of risk, financial, and organization and those seeking to serve in customer domains to drive business value, and awareness of the FSI regulatory this increasingly essential role (see sidebar). environment to help enable compliance and risk management through effective use of data. • Program leadership. An understanding of organizational design and the ability to shape and drive large-scale, cross-functional, multi-level programs around people, technology, processes, and tools–balancing long-term strategy with quick wins. • Communication skills. Ability to sell the agenda and educate cross-functional stakeholders about the embedded value to the enterprise of available data, serving as a change agent for the organization to overcome cultural resistance often fuelled by a “not-invented-here” mind-set.

In addition, CDO candidates should be: • Enthusiastic. Executive leadership commitment to champion data as a strategic business asset to drive significant new revenue opportunities across the enterprise. • Visionary. Strategic foresight to identify new business models, capture opportunities arising from technology and data advancements, deflect potential problems, and develop innovative, forward-facing capabilities that provide long-term competitive advantages. • Disruptive. Confidence to bring up new ideas and uncomfortable subjects, and to counter “not-invented-here” or “not worth the effort” attitudes to drive transformative change. • Collaborative. Willingness to serve as a “bridge builder” and facilitator to traverse divisional siloes, create synergies between business and technology functions, and align shared efforts to enable measurable business outcomes. • Agile. Capacity to deliver value to the business quickly and often by applying a pragmatic approach to develop governance and foundational data capabilities and avoid elongated initiatives to build “frameworks” that lose connectivity with the front line of the business.

08 The evolving role of the chief data officer in financial services | From marshal and steward to business strategist

Whether a CDO should be recruited may, in some instances, be offset by other internally or hired from the outside may capabilities–including a successful track depend, in large part, on a FI’s structure record implementing similar programs and underlying culture. Building the CDO outside the FSI, deep technical knowledge, function and team around an internal advanced leadership abilities, and strong hire can sidestep a number of potential communication skills, as well as unbridled stumbling blocks: Presumably, this CDO enthusiasm. candidate will already know the company, its industry and key objectives, as well as And even if one or more candidates appear its products, customers, business and to be a fit, certain internal obstacles or operational processes, critical data needs, misperceptions may slow an organization’s and more. However, most financial services efforts to define, establish, and empower organizations–especially those that are less the CDO’s role. For example, some board mature–rarely employ a single professional, members or C-level executives may not who actually possesses the end-to-end understand the role’s business value CDO skill set. This said, if there is an internal beyond regulatory compliance. Certain candidate with skills close to CDO level, the peer executives may view a new C-suite company may appoint this individual to the position as a threat to their departmental role and use external resources to provide processes and resources (both financial and collateral support for any skill gaps that may personnel). And, since data often resides in exist. departmental silos, they may perceive the designation of one individual to manage it Conversely, there are certainly instances across the enterprise to be an unnecessary in which it may be useful to bring in an interference–despite the potential benefits external hire, who can offer deep skills that such management might offer. Adding and experience from financial services or complexity, the traditional bank operating another industry, frank advice, and a fresh model holds that a senior executive perspective without the political “baggage” should have many direct reports. It may be of the incumbent candidate. While aligned difficult to justify a CDO’s senior position industry experience is certainly valuable, the and sphere of influence when the function right data executive with the appropriate doesn’t necessarily require a large staff like skills can often move across industries other C-level posts. Finally, business cycles and be very successful, particularly when that bring shifting priorities and executive surrounded by a team of industry-savvy emphasis on short-term, cost-savings, and professionals who understand the value revenue-generation can divert executive that the executive may bring from another attention and financial support from the sector or industry. While having deep long-term competitive advantages that an domain knowledge is certainly an advantage effective CDO can deliver. for the role, a lack of such experience

09 The evolving role of the chief data officer in financial services | From marshal and steward to business strategist

Three dimensions of daily challenges •• Identifying potential partners and/ From board members to department heads or acquisitions needed to enable to external financial analysts, FI stakeholders organizational performance in the face of typically underestimate the massive effort business model and technology changes or and lengthy timeline required to whip their externally-driven demands; and organization’s data assets into shape. Many •• Producing sufficiently positive incremental stakeholders also assume that once on results to maintain needed stakeholder board, the CDO (with limited staff assistance) support and funding. will single-handedly fix the problem when, in reality, the CDO’s first job is to define a path Representative technology challenges forward and convince others to help get the work done. •• Managing vast and increasing data volumes and complexities; If the CDO lacks adequate budget, staff or •• Keeping pace with the accelerated rate of authority, he or she may need to convince IT innovation while also dealing with legacy individual business units, back-office system complexity and shortcomings; functions and IT departments to provide the extra resources needed to 1) locate, •• Aligning with the CIO’s and/or CTO’s define, catalogue, govern and monitor data agendas to ensure a shared vision and assets across business lines, information priority for holistic development of a data- systems and geographies; and 2) audit related technology roadmap; and existing processes to understand their •• Leveraging emerging technologies such critical data components, and fine tune or as Big Data (digital, blockchain, robotics, rewrite them for a more data-driven business cognitive analytics, etc.), to derive business approach. As part of this undertaking, CDOs benefit from data and analytics. face daily challenges across three discrete, yet interrelated dimensions–business, Representative people challenges technology and people. Let’s take a closer look at each. •• Educating stakeholders, especially board members and other C-level executives, Representative business challenges about the need for and value of the CDO beyond regulatory compliance; •• Balancing enterprise and business unit goals for data collection and use; •• Building trusted relationships and overcoming conflict, especially when other •• Complying with increasingly intrusive departments may not want to relinquish and demanding regulations around data control of their data; and availability and quality, including Solvency II, BCBS 239 risk data aggregation, and certain •• Hiring and developing individuals with the local regulations such as those governing right balance of information management packaged retail investment products and business skills to drive the CDO office (PRIPS); agenda.

•• Establishing meaningful metrics by which data effectiveness and value that is (or could be) delivered as a result of more effective enterprise data management;

10 The evolving role of the chief data officer in financial services | From marshal and steward to business strategist

All of these challenges and others increase improve regulatory compliance through exponentially for the CDO of a global enhanced data quality, greater consistency institution, who must additionally navigate and traceability of data practices, and the complexities of local and reduced internal monitoring and audit costs. privacy laws, manage overseas Centers of Excellence (COEs) and global delivery 3. Add business value. The CDO drives models, rationalize redundant technologies, efficiencies and improves data use to capabilities and data management and enhance operations and add value across security initiatives, and orchestrate the the enterprise. The CDO monetizes and performance of resources, who often democratizes data by making it available present significant cross-cultural differences. to the business on a self-service basis, These are the kinds of drivers that have establishing the foundation for a cultural led to group CDOs to appoint CDOs in shift to an insights driven or advantaged local geographies to ensure that these organization. This, in turn, enables the complexities are effectively understood and FI to participate in new business models managed region by region. and partnerships within or across the FSI, improves customer service and sales across Better together: Talented CDO, all contact channels by fulfilling information empowering organization needs around customer behavior and Combining a talented, visionary CDO with retention to deliver more personalized a financial institution leadership team that service and offers, and increases visibility understands the role’s potential value and into new business opportunities. empowers it appropriately, can help bring out the best in both parties. How can an So, how can an organization increase its effective CDO help take an organization CDO’s effectiveness? from good to great? 1. Make the CDO a true C-level executive. 1. Improve technology and data While the CDO role may carry a C-level , management. An empowered CDO it frequently sits too low in the executive holds accountability for an FI’s strategic hierarchy to be truly impactful. Some FIs information management roadmap. In this bury the CDO multiple levels down in the IT capacity, the CDO helps steer capability department, reporting down from the chief investments that can produce tangible information officer (CIO) or chief technology financial benefits for the organization officer (CTO). Others place the CDO on the when they enable the elimination of data business side of the house, under the chief siloes and redundancies, accelerate the financial officer (CFO), (CRO) identification and remediation of data or chief marketing officer (CMO) because quality impairments, and lower the overall data is understood to be “owned” by the cost of manual “data wrangling.” business, not IT.

2. Reduce enterprise risk. The CDO function While industry-leading practices may favor enables holistic governance by bringing all positioning the CDO as a direct report of data-related activity under one umbrella and the chief operations officer (COO) to assure putting in place operational controls such the role’s neutrality between business and as data governance and data stewardship, IT, there is, in fact, no single right answer operational data quality management, because the CDO’s positioning may depend master data management, and metadata on the organization’s size, complexity, management. This concurrently serves to maturity, and other internal or external

11 The evolving role of the chief data officer in financial services | From marshal and steward to business strategist

considerations. In reality, the CDO should The CDO of the future sit where the position can most positively Organized mastery of data, analytics influence such concerns as availability, and the digital realm is quickly becoming completeness, quality, and reliability for an essential ingredient for FSI success. data consumers enterprise-wide. As the role New data forms such as blockchain, new continues to evolve, CDOs are increasingly innovations in insight-generation such reporting to the CEO, CFO or COO function, as cognitive analytics, and continuing sending the message that data is a critical advancements in Big Data management business priority, not just an IT concern. technologies and techniques all serve to elevate the importance of the CDO role 2. Send a top-down message that effective, and the demands of the job as a strategic enterprise-wide data management is business-enablement leader. With the a strategic imperative. Frequent and CDO’s further evolution (Figure 3) and supportive executive communications increased responsibility should come confirm to the organization at large that the more funding, larger staffs, increased CDO has the responsibility and necessary empowerment, and–along with other C-suite charter to operate, innovate and help set occupants–heightened board attention and the direction of the business to unlock the expectations. embedded value of its information assets.

3. Defuse territorial issues before they start. Fostering a positive relationship between the CDO and the CIO functions is imperative. Since FI business functions traditionally haven’t had the resources or leader to engage in data-related agenda- setting, technologists have grown to own data dictionaries, analytics, etc. The CDO is increasingly assuming these responsibilities and this can create friction. With direction from the CEO and board, the two positions can work collaboratively to mine business value from the organization’s technology and data resources.

12 The evolving role of the chief data officer in financial services | From marshal and steward to business strategist

Figure 3—The role of the CDO continues to evolve

Transformational Leader & Business Enabler Business Strategy Enabler Innovator CDO + Analytics “Insight Driven Organization”

What emerged Current evolution The future of the role 2014 - 2015 2016 The Future CDO 2.0 CDO 3.0 CDO 4.X

• Role emerged to become the lead • The CDO role emerges to take on • The future evolution of the role has data governance officer and lead an additional responsibilities of a CAO the CDO-CAO reporting to the enterprise data governance program CEO/board • In addition to delivering and • Role focused on facing off to managing a data foundation and • Emergence of the role as a data and regulators and instantiating data controls, the role emerges to deliver analytics empowered chief strategy controls–governance, stewardship, business value from the data officer (CSO) data quality, metadata leveraging analytics • Is a business enabler to the CFO, CRO, • Regulators forced banks to hire CDOs • Focus on innovation in leveraging COO, LOB executives emerging technologies to solve the • Some organizations hired the CDO • Continued emphasis on the role as a data and analytics challenge–big under a CFO or COO, focusing on the strategic business enabler–growth, data/Hadoop, blockchain, FinTech, “control function” cost, risk, compliance etc. • Role was given operational execution • Data truly becomes an asset to the • CDO emerges as an enabler of BCBS organization and is treated as such at supporting “growth” strategies, “cost the board level • Role focused on implementing reduction” strategies and “risk foundational technologies–MDM, reduction” strategies • Data aware, analytics driven - “Insight metadata, data quality Driven Organization” • Inherited the data warehousing and reporting functions

Looking further into the future, we may see While we can speculate at length about the the financial services CDO’s role expand changing dimensions of the role over time, to serve even more strategic needs of the one thing appears certain–the financial organization, including advanced analytics- services CDO is and will continue to be a based insight creation. To that end, once the critical and challenging role as businesses CDO has enabled the institution to establish increasingly come to realize that data is a reliable data infrastructure supported by their underlying DNA and continues to effective data governance standards, the offer untapped opportunities to advance CDO should be able to move on vigorously stakeholder returns. to the business of exploiting and monetizing data for competitive advantage as a combined chief data and analytics officer (CDAO)–a position that is already being formalized, particularly by many insurance organizations around the world and some banking institutions.

13 The evolving role of the chief data officer in financial services | From marshal and steward to business strategist

Contacts

Steve Jansz Jojy Mathew Deloitte Touche Tohmatsu Deloitte Consulting LLP Australia United States [email protected] [email protected]

Harvey Lewis Fernando Oliva Deloitte Deloitte SC United Kingdom LATCO [email protected] [email protected]

Jean-Pierre Maissin Gordon Shields Deloitte Deloitte Luxembourg Canada [email protected] [email protected]

Larry Manno Marc Zimmerman Deloitte Consulting LLP Deloitte Consulting LLP United States United States [email protected] [email protected]

14 The evolving role of the chief data officer in financial services | From marshal and steward to business strategist

Acknowledgements

We would like to thank Lauren Thomas, Hanna Hamilton, and Melissa Ferrer for their contributions in developing this report.

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