More financial service firms have harnessed data over the last 12 months to gain insight into business performance
- 82% of financial service organisations have become more reliant on data over the last year
- Over a quarter (26%) have seen an increase in their data needs
- While 38% increased their data budgets over the last 12 months
- COVID-19 has brought with it a business migration into the digital landscape
82% of financial service organisations have seen an increase in their data needs over the last 12 months to help enhance business operations/performance following the Covid pandemic, with nearly half of all respondents planning to increase their allotted budgets as alternative data acquisition has become increasingly important.
The findings showcase that the rise in data needs have been largely down to the rapidly increasing amount of useful information scattered across the web. This has allowed financial service firms to harness the right data during the pandemic to gain insight into business performance, identify future investment opportunities, and recognise market trends.
Data has become so crucial during Covid that most businesses would see a significant negative impact if their data flow were interrupted for up to two days, while 4% would start seeing negative effects within an hour.
Julius Černiauskas, Chief Executive Officer at Oxylabs, comments: “Clearly, the financial sector has doubled down on its data needs throughout the last 12 months, which is largely down to Covid. We have seen a trend that since the pandemic there has been an acceleration of businesses migrating to the digital landscape. As day-to-day processes have become digitised, more actionable and important business-related data has become publicly available. Implementing ways to gather such data provides previously inaccessible intelligence that can be pivotal for financial organisations if utilised correctly.”
As a result of this reliance on data, budgets have increased. The findings highlight nearly a half (43%) of respondents are planning to increase their budgets over the next 12 months.
Julius continued: “The landscape of data has changed. While traditional sources maintain their relevance, nowadays few businesses rely exclusively on them. As alternative data acquisition becomes increasingly essential, especially in the wake of the global pandemic, companies are expecting to increase their scraping-related budgets. By increasing budgets, financial companies can use alternative data to help them gain valuable, previously unseen insights and market signals, aiding them to bet on data-backed decisions.
“However, not all of the respondents plan on increasing their budgets. Almost one in ten businesses (9%) indicated they are planning to decrease their budgets allocated to data collection and management, most likely due to post-pandemic economic pressures. For these companies in the finance sector it’s going to be far more difficult for them to remain competitive with their competitors who are committing to strengthen their commitment to data.
“It is clear that alternative data has played a prominent role for financial services firms during the past year, allowing them to gain insights into performance and trends. With almost half looking to enhance their budgets over the next year, these organisations are already set to improve their knowledge and strategy for life after the pandemic,” concludes Julius.