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 global financial
services and insurance executives admit they are challenged by the
fractured nature and vast amount of data available, citing rich
analytics capabilities as difficult to achieve. In Canada, 65% of
executives admit they are challenged by the immense data they have.
With these challenges in mind, 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 Canada, the U.S., the 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 (74% in Canada) 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 know that rich analytics capabilities are critical
to remain competitive in today’s reality. While Canadian executives
may feel challenged by the immense amount of data they already have
access to, they plan to continue investing in new and expanded data
sources to enable them to better mitigate risk – and meet
constantly shifting consumer expectations,” said Glenn Waine,
Senior Director, Data Science, Data Strategy and Consulting at
TransUnion Canada. “But what is key is having the right technology
and talent in place to harness the true value and deep insights
this data can provide. This means businesses need to reevaluate
their technology and talent investments, including exploring
implementing artificial intelligence, machine learning and
alternative data models and sources. Ultimately, the companies that
best leverage these data and analytical capabilities will provide
consumers with the best experiences, directly impacting the
bottom-line.”
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. Specifically, 14% of global executives indicate they
currently do not have any solutions that can implement AI/ML into
analytical models, with Canada less so at 7%. This may point to the
fact that only 58% of Canadian respondents believe this technology
is a competitive differentiator, compared to the global
66%.
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 82% of executives in Canada.
Analytics Challenges Across
Regions
Region |
Percent of Respondents Stating that the Finding Data
Science Talent is a Challenge |
Percent of Respondents Stating that AI/ML is a Competitive
Differentiator |
Percent of Respondents Stating that they have no
AI/ML Analytical Models |
Canada |
82 |
% |
58 |
% |
7 |
% |
United States |
74 |
% |
66 |
% |
22 |
% |
United Kingdom |
85 |
% |
58 |
% |
18 |
% |
Hong Kong |
88 |
% |
62 |
% |
14 |
% |
India |
97 |
% |
78 |
% |
13 |
% |
Total |
86 |
% |
66 |
% |
14 |
% |
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
influence on the value of expanding data sources. The desire to
invest in data includes new sources such as non-traditional,
third-party and alternative data among the banking and insurance
communities. Over the next 24 months, 87% of institutions in Canada
have plans to use alternative data (see table below) – nearly on
par with the percentage across the globe (89%).
More than half of global respondents plan to increase spending
on most types of data sources with 65% intending to increase
spending on newer forms of data such as mobile information about
web browsing and app usage. In Canada, this percentage was nearly
the same at 63%. In addition, 76% of Canadian executives indicated
that the integration of new data sources will be very important or
important to their business strategies. Yet the lack of the right
tools continues to pose an issue as only 20% of Canadian firms can
integrate new data sources across all of their analytic
solutions.
Canadian Investment in Alternative Data
Sources Expected to Increase Over the Next Two Years
Alternative Data Source |
Investment Increase of More than 15% |
Investment Increase of 5% to 15% |
Investment Increase of Less than 5% |
Mobile Data (browsing, app usage, etc.) |
17 |
% |
29 |
% |
17 |
% |
Purchase (Spending) Data |
9 |
% |
31 |
% |
11 |
% |
Social Media Data |
10 |
% |
22 |
% |
25 |
% |
Transactional or Bank Account Data |
9 |
% |
20 |
% |
22 |
% |
*The Aite Group Global Survey of Marketing and Risk
Executives was conducted in Q3 2019. |
|
The survey also found that in Canada, 77% of marketing
executives and 59% of risk executives expect their overall budget
for data analytics to increase year-over-year. This was slightly
lower than the global average of 78% and 70% respectively, yet
still points to a significant investment in expanding the amount of
data available despite ongoing challenges such as data cleansing
and preparation, which 67% of Canadian respondents said can be
challenging. Global executives found this increasingly challenging
at 76%. However, this is in addition to the larger operational
issues such as cumbersome technology and the talent deficit.
“Businesses have access to more extensive data than ever before,
which can provide a huge opportunity to get closer to their
customers, mitigate risk, and help guide business strategy
overall,” added Waine. “But for many businesses, they don’t
currently have the optimal tools, technology, infrastructure and
talent in place to best harness the true value of this data. Moving
forward, it’s clear that investing in more sophisticated data
analytics resources is a top propriety for marketing and risk
executives across Canada to ensure they stay competitive in a
data-rich world.”
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. 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.
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 reaches consumers and
businesses in more than 30 countries around the world on five
continents. Based in Burlington, Ontario, TransUnion Canada
provides local service and support throughout Canada. Through the
power of information, TransUnion is working to build stronger
economies and families and safer communities worldwide. We call
this Information for Good. Visit www.transunion.ca to
learn more.
Contact
Aabida Dhanji, Ketchum Canada E-mail
aabida.dhanji@ketchum.com
Telephone 416 355
7424
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