Across the globe, companies are amassing volumes of data with the
intent of optimizing performance, identifying trends and meeting
rising consumer expectations. Yet nearly 75% of financial services
and insurance executives admit they are challenged by the fractured
nature and vast amount of data available. As a result, it’s
difficult for many of them to achieve rich analytics capabilities
to further their respective businesses.
Even with these challenges, a new Aite Group study commissioned
by TransUnion (NYSE: TRU) found that executives in the financial
services and insurance industries plan on continuing to secure more
data sources. Furthermore, they look to incorporate more artificial
intelligence (AI) and machine learning (ML) technology into their
analytic platforms to help them make sense of the information.
The global study explored the existing analytical processes,
tools, data sources and operational effectiveness of analytics
solutions used by the financial services and insurance industries.
The quantitative online survey recorded the feedback of 682
marketing and risk executives at financial institutions located in
the U.S., Canada, U.K., Hong Kong and India, many of whom do
business across the globe.
The study found that the proliferation of AI/ML is expected to
continue over the next 24 months with three in four global
executives considering integrating new analytic technology into
their platforms. There’s good reason for this implementation as AI
and ML can shorten the traditional analytic lifecycle from months
to just weeks or even days.
“Businesses are reevaluating their technology investments, and
looking to implement artificial intelligence, machine learning and
alternative data models and sources,” said Gene Volchek, senior
vice president of global data science and analytics at TransUnion.
“Their end game is to gain deeper analytics and competitive
insights that better allow them to mitigate risk and meet consumer
needs. Ultimately, the companies that best leverage these data and
analytical technologies will provide consumers with the best
experiences, resulting in more revenue.”
Help Wanted: Talent and Technology to Enhance Analytic
Capabilities
To stay competitive in a data-rich world, companies need access
to cutting-edge analytic solutions and data science expertise.
However, the study found that inflexible legacy technology, talent
shortages and regulatory barriers are among the factors that
prevent businesses from harnessing the power of analytics with
speed and ease.
“Most financial institutions lack a single, cohesive analytics
platform,” said Tiffani Montez, senior analyst at Aite Group.
“Firms may have vastly different data repositories and teams
managing analytics functions, often leading to multiple approaches
– by line of business, role and channel – across their
institutions. To address these issues, many financial institutions
are looking to centralize their data into a single platform that
can quickly support change and integrate new data models.”
Enhancing analytic capabilities through AI/ML technology is a
top priority globally, but with distinct differences across
geographies. The United States lags in AI/ML technology adoption
with 22% of U.S. executives indicating they currently do not have
any solutions that can implement AI/ML into analytical models.
While this capability may be commonly lacking, 66% of U.S.
respondents also believe this technology is a major
differentiator.
The data scientist talent shortage is another pressing issue
contributing to the global insights gap. As the volume of data has
increased, the need for data science and analytics professionals
has increased exponentially. Globally, 86% of respondents noted
there are challenges with accessing the right data science and
analytics talent, compared to 74% of executives in the U.S.
|
Analytics Challenges Across Regions |
Region |
Percent of RespondentsStating that FindingQualified Data
Scientistsis a Challenge |
Percent of RespondentsStating that AI/ML is
aCompetitiveDifferentiator |
Percent ofRespondents Statingthat they have no
AI/MLAnalytical Models |
United States |
74% |
66% |
22% |
Canada |
82% |
58% |
7% |
Hong Kong |
88% |
62% |
14% |
United Kingdom |
85% |
58% |
18% |
India |
97% |
78% |
13% |
Total |
86% |
66% |
14% |
*The Aite Group
Global Survey of Marketing and Risk Executives was conducted in Q3
2019. |
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To enable purposeful insights development, it is crucial for
companies to streamline their processes and have closer alignment
between the technical tools that are readily available and talent
with specialized knowledge of turning data into insights. In the
report, financial institutions noted they are increasing their
investments in both talent and in analytics technology – but these
firms are also greatly increasing their investments into another
resource, more data.
Despite Challenges Surrounding Analytic Capabilities,
Data Sources are Expected to Grow
Financial institutions have placed an increasing amount of
importance on the value of expanding data sources. Among the
banking and insurance communities, the desire to invest in data
includes new sources such as non-traditional, third-party and
alternative data. Over the next 24 months, 89% of institutions have
plans to use alternative data.
More than half of respondents plan to increase spending on most
types of data sources with 65% intending to increase spend on newer
forms of data such as mobile information about web browsing and app
usage. In the U.S. alone, 44% of executives indicated that the
integration of new data sources will be very important to their
business strategies. Yet the lack of the right tools continues to
pose an issue as only 14% of U.S. firms can integrate new data
sources across all of their analytic solutions.
|
Global Investment in Alternative Data Sources Expected to
Increase Over the Next Two Years |
Alternative Data Source |
Investment Increase ofMore than 15% |
Investment Increase of5% to 15% |
Investment Increase ofLess than 5% |
Mobile Data (browsing,app usage, etc.) |
19% |
25% |
21% |
Purchase (Spending)Data |
15% |
26% |
18% |
Social MediaData |
14% |
24% |
20% |
Transactional or BankAccount Data |
13% |
23% |
22% |
Shared Data Sources(Third-Party Source) |
13% |
19% |
24% |
*The Aite Group
Global Survey of Marketing and Risk Executives was conducted in Q3
2019. |
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The survey also found that across all regions, 78%
of marketing executives and 70% of risk executives expect their
overall budget to increase year-over-year, for data analytics /big
data and analytics/data science tools for each role, respectively.
This points to a significant investment in expanding the amount of
data available despite ongoing challenges such as data cleansing
and prep, which 76% of respondents said can be significantly
challenging. This is in addition to the larger operational issues
such as cumbersome technology and the talent deficit.
“Integrating data from across a consumer’s credit journey
provides a rich canvas for drawing insights, however it is clear
that financial and insurance industries are struggling to manage
and extract the right information without access to the proper
analytical tools or having people with the right skillset. Those
companies that put in the investment will also most likely develop
the top solutions that make them more competitive in today’s
consumer-driven market,” concluded Volchek.
To learn more about the state of analytics in the financial
services and insurance industries, please access the full Aite
Group and TransUnion report, Current State Assessment: Global
Analytics Ecosystem. Lenders and carriers interested in developing
models and other analytical solutions can collaborate with
TransUnion’s highly skilled data scientists and analytical experts,
and learn more about engaging with them in an immersive Innovation
Lab. More information about TransUnion’s analytics solutions can be
found here.
About TransUnion (NYSE: TRU)Information is a
powerful thing. At TransUnion, we realize that. We are dedicated to
finding innovative ways information can be used to help individuals
make better and smarter decisions. We help uncover unique stories,
trends and insights behind each data point, using historical
information as well as alternative data sources. This allows a
variety of markets and businesses to better manage risk and
consumers to better manage their credit, personal information and
identity. Today, TransUnion has a global presence in more than 30
countries and a leading presence in several international markets
across North America, Africa, Europe, Latin America and Asia.
Through the power of information, TransUnion is working to build
stronger economies and families and safer communities
worldwide.
We call this Information for Good.®
http://www.transunion.com/business
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Contact |
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Dave Blumberg |
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TransUnion |
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E-mail |
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david.blumberg@transunion.com |
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Telephone |
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312-972-6646 |
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A photo accompanying this announcement is available
at: https://www.globenewswire.com/NewsRoom/AttachmentNg/80270ab1-5b97-4f20-9075-36eeeaa205a9
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