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-management, 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 Chief Digital Officer Chief Analytics 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 risk management, • 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 board of directors 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 • Talent management 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