Role of Chief Data Officer
Role of Chief Data Officer
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The evolving role of the chief data officer in financial services | From marshal and steward to business strategist
Chief Information Officer Chief Data Officer Chief Digital Officer Chief Analytics Officer
What they do: What they do: What they do: What they do:
• Focus on building an inter- • Lead the data and analytics • Deliver in-depth insights • Assess the most
connected technology agenda of an organization into the end-to–end appropriate operating
ecosystem by assessing journeys of customers, model and data
and mapping the linkages • Establish and deliver supply chains, employees monetization approach for
between different arms of technologies, tools, and how they can be the business
the business approaches and improved using digital
methodologies to unlock technology • Define and drive the
• Assess and invest in the value in enterprise data enterprise-wide analytics
enterprise-wide platforms assets of an organization • Have a strong vision across strategy,
and licences, such as understanding of how to people, process, data and
visualization tools • Manage data as a strategic migrate traditional technology
asset and operationalize processes and systems to
• Control complex multi- data governance, data cater for mobility, social • Be heavily involved in the
sourced vendor quality and other controls media, sensors and so forth business transformation,
environments, mitigate SLA to sustain the integrity of change and education
failures, outage risks and the data of an organization • Have a natural leaning needed to embed analytics
optimize services toward innovation and into the culture to become
• Serve as trusted partner to development, including the insight-driven
• Redefine IT by working key business executives ability to teach and inspire
closely with other CxOs to focused on the customer, other stakeholders in the • Remain at the cutting edge
embed scalable technology enterprise risk organization of data developments and
into all approaches management, regulatory risks and drive future
compliance and finance • Able to take the insight programs for the
organization on a digital organization
• Fosters innovation transformative journey both
leveraging emerging Big internally and externally
Data and analytics
technologies
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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 regularly educating and updating the rest of
Data–of all shapes, formats and types–has the organization, beginning with the board
quickly become the FI’s most strategic asset; of directors and fellow C-suite executives,
one that continues to grow exponentially and working down the chain of command.
in volume, variety and complexity. Just
like other crucial corporate holdings, data Major influencers: Industry, market,
requires appropriate levels of stewardship and organizational maturity
and governance to ensure that its Today, more than 25 percent of Fortune
underlying value can be understood and 500 companies maintain a CDO position.
realized. The CDO is the executive who Typically, these data leaders serve their
holds the keys to help an organization both organizations across one or more of
protect and unlock the full value of its data four key dimensions, as identified in
assets. Figure 2–Catalyst, strategist, technologist
and/or operator. That said, however, it
The CDO builds and oversees a data should be acknowledged that multiple
strategy and set of competencies that work factors–including industry, market
in concert to enable information sharing, and organizational maturity–may
collaboration, compliance and security, and strongly influence a given CDO’s specific
efficient resource management to support responsibilities, reach, and impact.
such critical stakeholder objectives as:
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The evolving role of the chief data officer in financial services | From marshal and steward to business strategist
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The evolving role of the chief data officer in financial services | From marshal and steward to business strategist
CDO role that combines data management create multi-dimensional and multi-tiered
and architecture, governance, and CDO infrastructures that include functional,
analytics, with a number of large players regional, and shared service-focused data
already having significant programs in leadership roles under a single global data
place. leader. For example, select global banks
have already established CDO organizational
•• Alternatively, in the Canadian market,
structures that consist of a group level CDO
adoption of the CDO position first evolved
function, individual regional CDO functions,
as a direct response to the demands
separate line of business CDO functions and
of that country’s FSI regulator for two
CDO roles to support key global corporate
prominent Canadian banks that had
functions such as HR, finance, and risk.
significant US operations to each establish
a CDO function. These banks now field
Organization influence
well developed CDO-led organizations,
Organizational maturity also has been
which they continue to “fine tune” to
shown to impact the CDO’s evolutionary
enable benefit realization across their
journey–different types of financial services
respective enterprises.
firms simply move at different speeds. If, for
•• In Australia, on the other hand, the FSI example, an organization has just appointed
regulator’s ongoing focus on data risk a CDO, the initial focus of the role is likely
management across the sector has driven to be securing adequate departmental
the CDO role to gain more prominence resources (budget and employees) and
in larger institutions. Although risk and establishing a basic data management
regulation priorities are a key component organization supported by a set of
of the CDO mandate, many CDOs in the foundational processes and policies. These
Australian market are also now driving a are essential stepping stones to enable the
value-creation agenda, with increasing entire enterprise to leverage data assets
focus on the use of data as part of a wider and drive business transformation. The new
business and technology transformation. CDO also should build a business case for
value-adding data services that are enabled
•• Finally, in Latin America, the CDO role is in
by the new foundational processes and
the earliest stages of maturity–a concept
policies. In addition, the CDO can educate
being explored by many organizations
senior leadership about the FI’s current
across the banking and insurance sectors,
capabilities and the strategic potential of
but thus far only implemented by a few
analytics–in short; sell the vision and the
larger institutions in more mature financial
business case to “make it happen.”
markets such as Brazil and Colombia. For
those institutions that have taken action,
Overseeing data-related regulatory
most have positioned the role within the IT
compliance typically is the next rung up
department.
on the CDO evolutionary ladder. To fulfil
its regulatory reporting duties, a FI wants
One additional observation worth
and needs a CDO to help the organization
mentioning: financial organizations–
understand what data it has and what
particularly banks–that maintain a global
condition it is in, how to manage it in a
footprint appear to have a much more
consistent manner to remediate and
mature view of the CDO role than those
assure ongoing reliability, and how to
operating in single geographic markets.
rationalize multiple copies of data to enable
Given their size, complexity, local versus
one version of the truth. And, while most
enterprise remits, and other special
CDOs retain significant compliance-driven
requirements and needs, the former often
responsibilities, increasing numbers of
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The evolving role of the chief data officer in financial services | From marshal and steward to business strategist
FIs are looking beyond compliance for engines)—How can the CDO enable a
opportunities to exploit the value of data for strategy that simplifies, integrates and
competitive advantage. The desire of these enhances an organization’s ability to
entities (especially in insurance and retail leverage its data assets by marrying
banking) to make greater use of diverse technology innovation with existing data
types of data (i.e., structured, unstructured, management platforms and capabilities
internal, external, etc.) to generate business (e.g., warehouses, business intelligence
value is indicative of their sufficient maturity solutions, campaign management tools)
to recognize that data is a strategic asset that have evolved over many years and
and that the CDO must be appropriately with significant investment?
empowered and supported to serve as
•• Development of intelligent, machine-
its designated “parent.” Considering, for
based analytics solutions (e.g., cognitive)
example, the myriad places where customer
that can execute and interpret data-
data alone touches the enterprise, the need
intensive processes to generate new
to institutionalize the management of that
insights—What is the role of the CDO in
data is overwhelmingly clear.
responding to and/or leveraging these
innovations and trends?
Making the leap from data steward to
business strategist •• New sources of data—How can the CDO
To elevate the CDO’s role from data steward extract synergies from new sources of
to business strategist requires that both data (internal and external, structured
the FI and CDO adopt an entrepreneurial, and unstructured) and supporting
disruptive and innovation mind-set that technologies to derive business insights
will challenge and extend existing business that were not previously possible?
models, and identify and enable new ones.
What factors might drive this transformation As market drivers proliferate and data
and make the CDO an organization’s most increases in complexity, volume, and
critical change agent or resource? strategic importance, the CDO’s role
is expected to evolve into that of a
Some key factors include: transformational leader and innovator–the
executive who can guide an organization
•• Proliferation of new market entrants—
along a journey that enables it to be truly
How can FIs counter or partner with
information-centric, analytics-driven and
non-traditional market disruptors–such as
agile in leveraging all available information
financial technology (FinTech) companies
assets to make better business decisions,
or mass-market retail businesses that sell
better manage risk and be more responsive
credit cards, insurance and other financial
to the customers and markets it serves.
products–who threaten to disintermediate
However, the timing has to be right. There
traditional financial services providers?
needs to be a catalyst to create the spark–
•• Emergence of lower-cost, digital-only perhaps a burning issue or opportunity
competitors—How can enhanced data supported by an innovative and insightful
capabilities help FIs improve the customer board-level executive, who can envision
experience, increase loyalty and retention, the CDO’s ultimate value and is willing to
and reduce the overall cost to serve? aggressively advocate for the role and create
momentum around both essential and
•• Advent of technology and tool
strategic data management.
innovations (e.g., Big Data, sensor-
based and robotic solutions, real-time
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The evolving role of the chief data officer in financial services | From marshal and steward to business strategist
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The evolving role of the chief data officer in financial services | From marshal and steward to business strategist
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The evolving role of the chief data officer in financial services | From marshal and steward to business strategist
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The evolving role of the chief data officer in financial services | From marshal and steward to business strategist
All of these challenges and others increase improve regulatory compliance through
exponentially for the CDO of a global enhanced data quality, greater consistency
institution, who must additionally navigate and traceability of data practices, and
the complexities of local data security and reduced internal monitoring and audit costs.
privacy laws, manage overseas Centers
of Excellence (COEs) and global delivery 3. Add business value. The CDO drives
models, rationalize redundant technologies, efficiencies and improves data use to
capabilities and data management and enhance operations and add value across
security initiatives, and orchestrate the the enterprise. The CDO monetizes and
performance of resources, who often democratizes data by making it available
present significant cross-cultural differences. to the business on a self-service basis,
These are the kinds of drivers that have establishing the foundation for a cultural
led to group CDOs to appoint CDOs in shift to an insights driven or advantaged
local geographies to ensure that these organization. This, in turn, enables the
complexities are effectively understood and FI to participate in new business models
managed region by region. and partnerships within or across the FSI,
improves customer service and sales across
Better together: Talented CDO, all contact channels by fulfilling information
empowering organization needs around customer behavior and
Combining a talented, visionary CDO with retention to deliver more personalized
a financial institution leadership team that service and offers, and increases visibility
understands the role’s potential value and into new business opportunities.
empowers it appropriately, can help bring
out the best in both parties. How can an So, how can an organization increase its
effective CDO help take an organization CDO’s effectiveness?
from good to great?
1. Make the CDO a true C-level executive.
1. Improve technology and data While the CDO role may carry a C-level title,
management. An empowered CDO it frequently sits too low in the executive
holds accountability for an FI’s strategic hierarchy to be truly impactful. Some FIs
information management roadmap. In this bury the CDO multiple levels down in the IT
capacity, the CDO helps steer capability department, reporting down from the chief
investments that can produce tangible information officer (CIO) or chief technology
financial benefits for the organization officer (CTO). Others place the CDO on the
when they enable the elimination of data business side of the house, under the chief
siloes and redundancies, accelerate the financial officer (CFO), chief risk officer (CRO)
identification and remediation of data or chief marketing officer (CMO) because
quality impairments, and lower the overall data is understood to be “owned” by the
cost of manual “data wrangling.” business, not IT.
2. Reduce enterprise risk. The CDO function While industry-leading practices may favor
enables holistic governance by bringing all positioning the CDO as a direct report of
data-related activity under one umbrella and the chief operations officer (COO) to assure
putting in place operational controls such the role’s neutrality between business and
as data governance and data stewardship, IT, there is, in fact, no single right answer
operational data quality management, because the CDO’s positioning may depend
master data management, and metadata on the organization’s size, complexity,
management. This concurrently serves to maturity, and other internal or external
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The evolving role of the chief data officer in financial services | From marshal and steward to business strategist
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The evolving role of the chief data officer in financial services | From marshal and steward to business strategist
Looking further into the future, we may see While we can speculate at length about the
the financial services CDO’s role expand changing dimensions of the role over time,
to serve even more strategic needs of the one thing appears certain–the financial
organization, including advanced analytics- services CDO is and will continue to be a
based insight creation. To that end, once the critical and challenging role as businesses
CDO has enabled the institution to establish increasingly come to realize that data is
a reliable data infrastructure supported by their underlying DNA and continues to
effective data governance standards, the offer untapped opportunities to advance
CDO should be able to move on vigorously stakeholder returns.
to the business of exploiting and monetizing
data for competitive advantage as a
combined chief data and analytics officer
(CDAO)–a position that is already being
formalized, particularly by many insurance
organizations around the world and some
banking institutions.
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The evolving role of the chief data officer in financial services | From marshal and steward to business strategist
Contacts
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The evolving role of the chief data officer in financial services | From marshal and steward to business strategist
Acknowledgements
We would like to thank Lauren Thomas, Hanna Hamilton, and Melissa Ferrer for their
contributions in developing this report.
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