The Good, Bad, and Opportunities in How Financial Institutions Leverage Consumer Financial Data

Despite having access to more consumer financial data than ever before, many financial providers struggle to extract value from it — missing opportunities to improve outcomes for both their customers and business.

The value of data is not disputed, but most firms struggle to effectively maximize the use of consumer financial data across their businesses, leaving customer and business benefits unrealized. What’s worse: They know this is the case.

A recent Forrester Consulting study, commissioned by MX, surveyed 150 data strategy leaders in North American financial institutions about the importance of the effective use of consumer-permissioned financial data. Here’s a quick summary:

Want to learn more? Read the full study here.

The Good: The Benefits of Financial Data Intelligence are Vast

Financial institutions recognize the value of financial data intelligence and the majority (79%) believe it is critical to their organization’s success in the future. Leaders also understand that a significant improvement in the ability to utilize consumer financial data could be transformational. Expected benefits include: 

The Bad: Most Financial Providers Still Largely Use Data the Same Way 

Many financial services providers are just starting the journey to maximize the power of consumer financial data for both customer and business benefits. Sixty-two percent of data strategy respondents say their organization still largely uses data the same way they always have. And, when asked which use cases — like providing personalized insights, monitoring and managing where consumers share financial data, and making informed decisions — they were capable of today, no single use case had an adoption rate higher than 67%. 

The Opportunity: Investing in the Right Partner, Processes, and Technology

To unlock the full value of consumer-permissioned financial data, financial providers should be prepared to break down silos, invest in technologies and improved automation, and search for the right data partner. 

And, it doesn’t mean rebuilding their data programs from the ground up. Here are the steps data strategy leaders are taking:

According to Nandita Gupta, MX’s Chief Product Officer, “intelligence locked away is intelligence wasted. Too many institutions are trapped in this paradox of owning raw information, but not getting any value from it.” 

Financial institutions recognize this challenge and have significant opportunities to do more with consumer-permissioned financial data. Are you making the most of your financial data?