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

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

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

1 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 FSI organisational chart reveals the existence of numerous data-centric or sensitive C-level positions as shown in Figure 1. It is important to know how these roles differ from the CDO position.

Figure 1: Overview of data-driven roles. What’s the difference?

Chief Information Chief Data Officer Officer Technologist Scientist Innovator Strategist What they do: What they do: What they do: What they do:

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

2 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 The importance of this communication Data of all shapes, formats and types, responsibility cannot be understated. has quickly become the FSI most We have observed CDOs spending much strategic asset; one that continues to of their time – especially in the early days grow exponentially in volume variety – regularly educating and updating the and complexity. Just like other crucial rest of the organisation beginning with corporate holdings, data requires the and fellow C-suite appropriate levels of stewardship and executives, and working down the chain governance to ensure that its underlying of command. value can be understood and realised. The CDO is the executive who holds Major influencers: Industry market the keys to help an organisation both and organisational maturity protect and unlock the full value of its Today more than 25 percent of Fortune data assets. 500 companies maintain a CDO position. Typically these data leaders serve their The CDO builds and oversees a data organisations across one or more of four Chief Information Chief Data Officer Chief Digital Officer Chief Analytics strategy and set of competencies that key dimensions as identified in Figure Officer Officer work in concert to enable information 2 – Catalyst, strategist, technologist Technologist Scientist Innovator Strategist sharing collaboration compliance and/or operator. That said, it should What they do: What they do: What they do: What they do: and security and efficient resource be acknowledged that multiple management to support such critical factors – including industry, market •• Focus on building •• Lead the data and •• Deliver in-depth •• Assess the most stakeholder objectives as: and organisational maturity – may an inter-connected analytics agenda of an insights into the appropriate operating strongly influence a given CDO’s specific •• Growing and sustaining revenue technology ecosystem organisation end-to-end journey model and data responsibilities, reach and impact. by assessing and of customers, supply monetisation •• Establish and deliver •• Selling the right solution to the right mapping the linkages chain and employees, approach for the Figure 2: The CDO typically has a focus across one to four key dimensions technologies, tools, customer and maximising profits between different and how they can be business approaches and Four faces of the CDO Focus areas arms of the business improved using digital •• Enhancing operational efficiency and methodologies to •• Define and drive •• Innovation technology reducing associated costs Catalyst Seeks to instigate •• Assess and invest unlock the value in the enterprise-wide innovation through •• Reengineering •• Enhancing risk management in enterprise-wide enterprise data assets •• Have a strong analytics vision across exploration of data and •• platforms and licenses of an organisation understanding of how strategy, people, •• Reducing fraud analytics •• Change management such as visualisation to migrate traditional process, data and •• Manage data as a •• Stakeholder management tools processes and technology •• Improving regulatory compliance strategic asset and Strategist Partners with the •• Strategy development systems to cater for •• Enabling new business strategies and •• Control complex operationalise data •• Be heavily involved business to align business •• Demand management mobility, social media, innovation. multi-sourced governance, data in the business and data analytics sensors and so forth •• Portfolio management vendor environments quality and other transformation change strategies to maximise •• Regulatory planning The CDO takes an enterprise view of mitigate Sercice Level controls to sustain the •• Have a natural and the education the value of data and data – building bridges and knocking •• Risk management Agreements (SLA) integrity of the data of tendency toward needed to embed analytics investments •• Value management failures, outage risks, an organisation innovation and analytics into the down walls as needed – to enable data •• Architecture and optimise services development including culture to become to flow expediently across departments Technologist Assesses technologies •• Serve as trusted the ability to teach insight-driven and functions for better consumption and design data as well as •• Technology partners •• Redefine IT by working partner to key and inspire other and leverage. In addition more than ever technical architecture to •• Delivery management closely with other business executives •• Remain at the stakeholders in the the CDO is the ambassador for the vision increase business agility •• Solution delivery CXOs to embed focused on the cutting edge of data organisation business value and resulting benefits of and manages complexity •• Technology governance scalable technology customer enterprise, developments and effective data management. •• Security and controls into all approaches risk management, •• The ability to take risks and drive future •• Data governance regulatory compliance the organisation on a insight programmes Operator Defines, manages and finance digital-transformation for the organisation and governs data and •• Data quality journey both internally technology policies/ •• Operational performance •• Fosters innovation and externally programmes and •• Shared services leveraging emerging operations to promote •• Sourcing Big Data and analytics and control operational •• Financial management technologies efficiency and effectiveness

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

Industry influence exposure and risk around data use (e.g. that combines data management, In general, within the global FSI the clinical trial data, patient data, product architecture, governance and analytics banking and securities sectors are development data etc.). Many LSHC with a number of large players who the most mature when it comes to players employ a CDO to mitigate such already have significant programmes in instantiating and leveraging the CDO risks and concurrently reap regulatory place. position. For example, in banking the compliance and direct business benefits. •• Alternatively, in the Canadian market CDO position was initially created in Similarly a CDO in a consumer products adoption of the CDO position first large part to address data governance company often collaborates with the evolved as a direct response to the and data quality challenges in response CAO and to demands of the country’s FSI regulator to ever-increasing business user maximise the use of data assets in for two prominent Canadian banks that complaints. generating insights to enhance customer had significant US operations to each retention, acquire new accounts and establish a CDO function. These banks The role gained further importance drive overall revenue growth. now field well developed CDO-led as industry regulatory mandates such organisations which they continue to as Basel II and then Basel III spelled Regardless of the individual corporate “fine tune” to enable benefit realisation out in greater detail specific levels of drivers, we see a common reliance on across their respective enterprises. data management transparency that the CDO role across all industries to banks (and their CDOs) were compelled assure the integrity and readiness of •• In Australia, on the other hand, the to deliver. In many banks today the information for internal business users FI regulator’s ongoing focus on data CDO’s primary responsibilities remain and enable the realisation of critical risk management across the sector focused on regulatory compliance and externally-focused business objectives. has driven the CDO role to gain more in operationalising regulatory mandates prominence in larger institutions. such as BCBS 239 (principles for effective Market influence Although risk and regulation priorities risk-data aggregation and risk reporting); Geographic market considerations also are a key component of the CDO for the larger players however there also have impacted both the adoption and mandate, many CDOs in the Australian is growing awareness of the position’s evolution of the CDO position often market are also now driving a value- potentially broader benefits as an independent of industry considerations. creation agenda with increasing enabler of business-insights strategies For example: focus on the use of data as part of and innovation. a wider business and technology •• In South Africa there are currently transformation. four official Chief Data Officers, all of On the insurance side of the equation, whom work in the financial services appointing CDOs has been a much more One additional observation worth sector. Prior to February 2016 none of protracted exercise. Today, most of the mentioning: financial organisations – them knew that the other existed. This largest P&C organisations have a defined particularly banks – that maintain a was a big problem as South African CDO or data leadership position in place global footprint appear to have a much companies were facing the same together with some form of a supporting more mature view of the CDO role than implementation/integration challenges data governance organisation. Yet, while those operating in single geographic but had no way of communicating some Parent and Child (P&C) players markets. Given their size, complexity, until now. The introduction of forums are perhaps more mature in their local versus enterprise remits – and and roundtable discussions hosted by messaging and capabilities most still other special requirements and Corinium has helped create awareness link the CDO role to an IT or operational needs – the former too often create with regard to the positions that CDOs agenda which frankly may limit its multi-dimensional and multi-tiered CDO hold in the African market. overall business value. Life and Health infrastructures that include functional (L&H) firms on the other hand are more •• In Europe the earliest banking CDOs regional and shared service-focused slowly embracing the need for a CDO were chartered with organising and data leadership roles under a single position, again typically as an adjunct IT overseeing data elements needed to global data leader. For example, select leadership position. meet Basel II/III and other regulatory global banks have already established compliance mandates. Insurance CDO organisational structures that For FSI interested in potential industry companies meanwhile appointed consist of a group-level CDO function, models for the CDO function outside “Heads of Data Compliance” to manage individual regional CDO functions, of financial services, Life Sciences and Solvency II reporting demands. Now separate line of business CDO functions Health Care (LSHC) is probably farthest that executives’ understanding is and CDO roles to support key global along the maturity spectrum. Similar more mature both banking and corporate functions such as HR, finance to financial services, the LSHC sector is insurance organisations are moving and risk. highly regulated and has considerable toward a more fully-fledged CDO role

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

Organisation influence to institutionalise the management of •• Development of intelligent Organisational maturity has also been that data is overwhelmingly clear. machine-based analytics solutions shown to impact the CDO’s evolutionary (e.g. cognitive) that can execute and journey – different types of financial Making the leap from data steward interpret data-intensive processes services firms simply move at different to business strategist to generate new insights – What is speeds. If for example an organisation To elevate the CDO’s role from Data the role of the CDO in responding to has just appointed a CDO the initial Steward to Business Strategist requires and/or leveraging these innovations focus of the role is likely to be securing that both the FI and CDO adopt and trends? adequate departmental resources an entrepreneurial disruptive and •• New sources of data – How can (budget and employees) and establishing innovation mindset that will challenge the CDO extract synergies from new a basic data management organisation and extend existing business models sources of data (internal and external supported by a set of foundational and identify and enable new ones. structured and unstructured) and processes and policies. These are supporting technologies to derive essential stepping stones to enable the What factors might drive this business insights that were not entire enterprise to leverage data assets transformation and make the CDO an previously possible? and drive business transformation. The organisation’s most critical change agent new CDO should also build a business or resource? As market drivers proliferate and data case for value-adding data services that increases in complexity, volume and are enabled by the new foundational Some key factors include: strategic importance the CDO’s role processes and policies. In addition, the •• Proliferation of new market is expected to evolve into that of a CDO can educate senior leadership entrants – How can FIs counter transformational leader and innovator– about the FSI current capabilities and or partner with non-traditional the executive who can guide an the strategic potential of analytics – in market disruptors – such as financial organisation along a journey that short; sell the vision and the business technology (FinTech) companies or enables it to be truly information-centric, case to “make it happen.” mass-market retail businesses that analytics-driven and agile in leveraging sell credit card insurance and other all available information assets to Overseeing data-related regulatory financial products – who threaten to make better business decisions, better compliance typically is the next rung disintermediate traditional financial manage risk and be more responsive to up on the CDO evolutionary ladder. To services providers? the customers and markets it serves. fulfil its regulatory reporting duties a FI However the timing has to be right. needs a CDO to help the organisation •• Emergence of lower-cost digital-only There needs to be a catalyst to create understand what data it has and what competitors – How can enhanced the spark – perhaps a burning issue or condition it is in, how to manage it in a data capabilities help FIs improve the opportunity supported by an innovative consistent manner to remediate and customer experience, increase loyalty and insightful board-level executive who assure ongoing reliability and how and retention and reduce the overall can envision the CDO’s ultimate value to rationalise multiple copies of data cost to serve? and is willing to aggressively advocate to enable one version of the truth. •• Advent of technology and tool for the role and create momentum While most CDOs retain significant innovations (e.g. Big Data sensor- around both essential and strategic data compliance-driven responsibilities based and robotic solutions management. increasing numbers of FI are looking real-time engines) – How can beyond compliance for opportunities the CDO enable a strategy that to exploit the value of data for simplifies integrates and enhances an competitive advantage. The desire of organisation’s ability to leverage its these entities (especially in insurance data assets by marrying technology and retail banking) to make greater use innovation with existing data of diverse types of data (i.e. structured, management platforms and capabilities unstructured internal, external etc.) to (e.g. warehouses generate business value is indicative solutions campaign management tools) of their sufficient maturity to recognise that have evolved over many years and that data is a strategic asset and that the with significant investment? CDO must be appropriately empowered and supported to serve as its designated “parent.” Considering for example the myriad places where customer data alone touches the enterprise, the need

5 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 organisation is one that aggressively represents and enables the data management and insight-generation needs of all critical business functions – including finance, risk, marketing, sales compliance, product development, human resources, shared services and individual lines of business. To do so it is critical that the CDO “has a seat at the table” together with other senior executives who lead the businesses and functions that the CDO must serve. However, to sit at that table as an equal, the CDO must possess certain requisite business technology and management skills and experience that is often not found in one individual. This can present a serious challenge for both the organisation and those seeking to serve in this increasingly essential role (see below).

The CDO CV •• Business perspective •• Visionary Effective CDO candidates in the FSI Expertise at the intersection of risk, Strategic foresight to identify present impressive curricula vitae financial and customer domains to new business models, capture (CV) that showcase their ability to drive business value and awareness opportunities arising from combine technology, business, and of the FSI regulatory environment technology and data advancements, management acumen to deliver to help enable compliance and risk deflect potential problems and tangible enterprise value. Examples of management through effective use develop innovative, forward-facing sought-after skills and qualifications of data. capabilities that provide long-term may include: competitive advantages. •• Programme leadership •• Domain experience An understanding of organisational •• Disruptive Institutionalised knowledge of the FSI design and the ability to shape and Confidence to bring up new ideas (or a specific sub-sector), including drive large-scale, cross-functional, and uncomfortable subjects and to a thorough understanding of critical multi-level programmes around counter “not-invented-here” or “not operations, customer interactions people, technology, processes and worth the effort” attitudes to drive and other external and internal tools – balancing long-term strategy transformative change. stakeholder expectations and needs. with quick wins. •• Collaborative •• IT background •• Communication skills Willingness to serve as a “bridge Demonstrated Information Ability to sell the agenda and educate builder” and facilitator to traverse Management (IM) and quantitative cross-functional stakeholders divisional siloes, create synergies skills – including working knowledge about the embedded value to between business and technology of IT infrastructure, various the enterprise of available data, functions and align shared efforts technologies/platforms and aligned serving as a change agent for the to enable measurable business vendor solutions and the capabilities organisation to overcome cultural outcomes. they bring – as well as experience resistance often fuelled by a “not- •• Agile leading major IM programmes in key invented-here” mindset. Capacity to deliver value to the business areas. business quickly and often by In addition, CDO candidates should be: •• Quantitative mindset applying a pragmatic approach Ability to develop a business case •• Enthusiastic to develop governance and and performance metrics to secure Executive leadership commitment foundational data capabilities and programme funding/resources and to champion data as a strategic avoid elongated initiatives to build to measure business value. business asset to drive significant “frameworks” that lose connectivity new revenue opportunities across with the front line of the business. the enterprise.

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

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

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

Three dimensions of daily challenges Representative business challenges Representative technology From board members to department challenges •• Balancing enterprise and business unit heads to external financial analysts, FI goals for data collection and use •• Managing vast and increasing data stakeholders typically underestimate volumes and complexities the massive effort and lengthy timeline •• Complying with increasingly required to whip their organisation’s data intrusive and demanding regulations •• Keeping pace with the accelerated assets into shape. Many stakeholders around data availability and quality, rate of IT innovation while also dealing also assume that once on board, the CDO including Solvency II, BCBS 239 risk with legacy system complexity and (with limited staff assistance) will single- data aggregation and certain local shortcomings handedly fix the problem when in reality, regulations such as those governing •• Aligning with the CIO’s and/or CTO’s the CDO’s first job is to define a path packaged retail investment products agendas to ensure a shared vision and forward and convince others to help get (PRIPS) priority for holistic development of a the work done. •• Establishing meaningful metrics by data-related technology roadmap which data effectiveness and value If the CDO lacks adequate budget, staff or •• Leveraging emerging technologies that is (or could be) delivered as a authority, he or she may need to convince such as Big Data (digital, blockchain, result of more effective enterprise data individual business units, back-office robotics, cognitive analytics, etc.) to management functions and IT departments to provide derive business benefit from data and the extra resources needed to: •• Identifying potential partners and/ analytics 01. Locate, define, catalogue, govern and or acquisitions needed to enable monitor data assets across business organisational performance in the face Representative people challenges lines, information systems and of business model and technology •• Educating stakeholders, especially geographies changes or externally-driven demands board members and other C-level 02. Audit existing processes to •• Producing sufficiently positive executives about the need for and understand their critical data incremental results to maintain needed value of the CDO beyond regulatory components and fine tune or rewrite stakeholder support and funding compliance them for a more data-driven business approach. •• Building trusted relationships and overcoming conflict, especially when As part of this undertaking, CDOs face other departments may not want to daily challenges across three discrete relinquish control of their data yet interrelated dimensions: business, •• Hiring and developing individuals technology and people. Let’s take a closer with the right balance of information look at each. management and business skills to drive the CDO office agenda

All of these challenges and others increase exponentially for the CDO of a global institution, who must additionally navigate the complexities of local data security and privacy laws, manage overseas Centers of Excellence (COEs) and global delivery models, rationalise redundant technologies, capabilities and data management and security initiatives and orchestrate the performance of resources who often present significant cross-cultural differences. These are the kinds of drivers that have led group CDOs to appoint CDOs in local geographies to ensure that these complexities are effectively understood and managed region by region.

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

Better together: Talented CDO, and retention to deliver more 2. Send a top-down message empowering organisation personalised service and offers and that effective, enterprise- Combining a talented, visionary CDO with increases visibility into new business wide data management is a a financial institution leadership team opportunities. strategic imperative. Frequent that understands the role’s potential and supportive executive value and empowers it appropriately, can So, how can an organisation increase its communications confirm to the help bring out the best in both parties. CDO’s effectiveness? organisation at large that the CDO How can an effective CDO help take an has the responsibility and necessary organisation from good to great? 1. Make the CDO a true C-level charter to operate, innovate and help 1. Improve technology and data executive. While the CDO role may set the direction of the business to management. An empowered carry a C-level title, it frequently sits unlock the embedded value of its CDO holds accountability for a FI’s too low in the executive hierarchy information assets. strategic information management to be truly impactful. Some FI’s bury 3. Defuse territorial issues before roadmap. In this capacity, the CDO the CDO multiple levels down in the they start. Fostering a positive helps steer capability investments IT department, reporting down from relationship between the CDO and that can produce tangible financial the CIO or the CIO functions is imperative. Since benefits for the organisation when (CTO). Others place the CDO on the FI business functions traditionally they enable the elimination of data business side of the house, under the haven’t had the resources or siloes and redundancies, accelerate (CFO), Chief leader to engage in data-related the identification and remediation of Risk Officer (CRO) or Chief Marketing agenda setting, technologists have data quality impairments and lower Officer (CMO) because data is grown to own data dictionaries the overall cost of manual “data understood to be “owned” by the analytics, among others. The CDO wrangling.” business, not IT. is increasingly assuming these 2. Reduce enterprise risk. The responsibilities and this can create CDO function enables holistic While industry-leading practices may friction. With direction from the CEO governance by bringing all data- favor positioning the CDO as a direct and board, the two positions can related activity under one umbrella report of the chief operations officer work collaboratively to mine business and putting in place operational (COO) to assure the role’s neutrality value from the organisation’s controls such as data governance between business and IT, there technology and data resources. and data stewardship, operational is, in fact, no single right answer data quality management, master because the CDO’s positioning may The CDO of the future data management and metadata depend on the organisation’s size, Organised mastery of data, analytics management. This concurrently complexity, maturity and other and the digital realm is quickly becoming serves to improve regulatory internal or external considerations. In an essential ingredient for FSI success. compliance through enhanced data reality, the CDO should sit where the New data forms such as blockchain, new quality, greater consistency and position can most positively influence innovations-in-insight-generation such traceability of data practices and such concerns as availability, as cognitive analytics and continuing reduced internal monitoring and completeness, quality and reliability advancements in Big Data management audit costs. for data consumers enterprise-wide. technologies and techniques all serve to 3. Add business value. The CDO drives As the role continues to evolve, elevate the importance of the CDO role efficiencies and improves data use to CDOs are increasingly reporting to and the demands of the job as a strategic enhance operations and add value the CEOs, CFO or COO function, business-enablement leader. With the across the enterprise. The CDO sending the message that data is a CDO’s further evolution (Figure 3) and monetises and democratises data by critical business priority not just an IT increased responsibility should come making it available to the business concern. more funding, larger staffs, increased on a self-service basis, establishing empowerment and – along with other the foundation for a cultural shift C-suite occupants – heightened board to an insights driven or advantaged attention and expectations. organisation. This in turn, enables the FI’s to participate in new business models and partnerships within or across the FSI, improves customer service and sales across all contact channels by fulfilling information needs around customer behavior

9 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 Business Enabler Business Strategy Enabler Leader & Innovator CDO + Analytics “Insight Driven Organisation”

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

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

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

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

Contacts

South Africa

Navin Sing Werner Swanepoel Wesley Govender Managing Director: Risk Advisory Africa Risk Advisory Africa Leader: Data Analytics Director: Risk Advisory Africa Mobile: +27 83 304 4225 Mobile: +27 82 442 5948 Mobile: +27 83 616 2929 Email: [email protected] Email: [email protected] Email: [email protected]

East Africa

Julie Akinyi Nyangaya William Oelofse Risk Advisory Regional Leader: East Africa Director: Risk Advisory East Africa Mobile: +254 72 011 1888 Mobile: +254 20 423 0000 Email: [email protected] Email: [email protected]

West Africa

Anthony Olukoju Temitope Aladenusi Risk Advisory Regional Leader: West Africa Director: Risk Advisory West Africa Mobile: +234 805 209 0501 Mobile: +234 805 901 6630 Email: [email protected] Email: [email protected]

Central Africa

Tricha Simon Rodney Dean Risk Advisory Regional Leader: Central Africa Director: Risk Advisory Central Africa Mobile: +263 867 700 0261 Mobile: +263 867 700 0261 Email: [email protected] Email: [email protected]

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