“Data Silos are Bad, make them STOP !”
June 29, 2018
Dion F. Lisle Managing Director of FACERE25
“If you compare banks to companies like Google, it’s evident that banks are still at the nascent stage of the digital and data revolution.” Vik Atal — Former Citibank
We need another article about bank data silos about as much as we need another bank data silo. I am not going to go into details about how to solve the data silo issue. Although I believe data silos, like all issues at a bank are more cultural than technical. This post is about how naive we can be when staring into the data abyss.
This blog post is based on a very hands on experience I had at a bank innovation day. Stop snickering, it was a really great event with great participation and very enthusiastic (and smart) bank employees. The division CEO was on site for all 3 days of the event, so full credit for leading from the top. The format was clever, teams of bank employees would get together for 2 days and brainstorm and “develop” innovative solutions for the bank. On the 3rd day they presented their ideas or solutions to everyone on a roving basis from their tables like a tradeshow. (minus the hoopla and giveaways and $2,000 registration fee)
I should note this was a Corporate & Investment bank, so no Retail.
Then employees would walk through and hear the teams “pitch” their solutions to bank employees. Each person walking through was given some “VC funds” to invest in the ideas they liked the best. Some teams had PowerPoints of their high-level idea, others had very well thought out architectures and one team had a demo, a demo!!
A Demo after 2 days, I hate the term “Rock Star”, but a 2 day demo, these people are Rock Stars.
All of the teams did a great job on thinking specifically about a customer or bank issue that needed to be solved. If I categorized the ideas generally speaking the number one category by a long shot would be:
Breaking Down Data Silos
Not a single solution about moving money faster, some solutions mentioned using Blockchain to tokenize assets, and very few of them were about AI for amazing analytics.
Nope, the number one category was pulling disparate data sources into one view or place. I of course asked the teams proposing this one data view about their Data Lake strategy or what the data sources are…it did not register. These were business folks, not IT folks… mostly. No issue with them not understanding the required technology, but they really were (I’m being nice here) naïve about what this meant and how hard it is to solve.
It seemed everyone had presumed that IT was on a permanent vacation and it had never occurred to IT that a single view of a customer would be useful. I have never been a Bank IT guy and even I can give IT teams more credit for at least caring about the disparate data sources issue. I know IT teams have worked on the issue for years and made little progress for a variety of reasons, not the least of which is disparate business units.
Let’s be honest now, how often is technology the limiting factor?
Bank culture has often rewarded the data silo “strategy.” How could they reward this lack of strategy you ask? By incenting the opposite of data integration? I have seen banks that rewarded the debit team for “beating” the credit card team, um really, shouldn’t the focus be on the customer? Sorry, that is a separate blog post for another time.
Now comes the disappointing part of this otherwise great exercise.
The most “VC Funds” invested went to 3 data silo ideas, two of which were very vague. So, vague I didn’t actually consider them to be very good. Very nice people, great teams, but the “idea” was “get all data in one place.” No idea how that would work. No idea where the data would come from. No idea what technology would suddenly allow it. Not even exactly what data.
Simply, we need one view of all data.
That is a “motherhood & apple pie” idea, no one could argue it. I gave my “VC Funds” to the ideas that considered the HOW TO GET ONE VIEW. You honestly would not believe how well thought out these two day ideas were, I was WOW, blown away.
I love innovation and am a big fan of “no bad ideas” or no limits innovation.
I should note I have been called Tigger, because I am all about THE POSSIBLE, with no limits to the point of naivety, and possibly worse. Tigger being the Pooh Bear character of boundless optimism and energy.
But here we are looking at very well thought out ideas that would deliver value to the bank in 2018 or 2019 being “under-funded” for ideas that were basically “goodness & access” of data.
Hence the issue.
Motherhood & Apple Pie won out over well thought out “hard problems” to solve with not hard earned “VC Funds.” I was disappointed in the moment but as I thought later, I realized it was natural to want easy problem solutions NOW. Also, I met the CEO of the group and realized, this team knows their business and what needs to be done to really deliver value to their customers.
While they fantasize about a magic wand solving their huge data silo issue I am guessing they will continue their focus on their customer needs, and that will be their salvation. Data is of course the present and future of banking success. Although not a solution to the data gap that many banks suffer, a hyper focus on customer’s needs will certainly help until the magic wand of data integration arrives.
