Why data literacy matters in the financial industry

“If we have data, let’s look at data. If all we have are opinions, let’s go with mine.” – Jim Barksdale

In his quote above, former Netscape CEO succinctly summarises the importance of data literacy in decision-making. This holds especially true today in Singapore’s financial services industry. While major financial institutions are creating and storing more data than businesses in other industries, much of the data remain untapped. On top of that, a survey in March 2018 by data analytics platform Qilk found that data illiteracy is a significant problem among Singapore’s workforce.

 

What is data literacy?

Much like “regular” literacy, data literacy commonly refers to an individual’s ability to read, understand, create and derive meaningful information from data, and also encompasses aspects of data quality, data governance, open data and big data.

 

Why is data literacy important?

Data is set to drive the growth of businesses and economies around the world. Research firm IDC estimates that by 2020, revenues for Big Data and data analytics will surpass $203 billion. Financial institutions that capitalise on big data are able to vastly improve the value and efficiency of business processes across functions. For example, insights from big data can help banks customise better and more personalised consumer experience, monitor and predict trading patterns for compliance requirements and improve market surveillance capabilities.

At an organisational level, it is about driving a data-ready culture and building effective data strategies for the business. Johnson Poh, Head Data Science at DBS Bank shares more in his article contribution “Developing an Effective Data Strategy” on Learn@IBF. For financial practitioners, the key is in improving their data literacy and critical thinking skills.  This will enable them to organise and translate available data into insights and opportunities for the financial institution, while navigating the challenges of data management.

 

How much do we need to know about data?

While we need not all be data scientists, the ability to understand data and how data analytics is applied to decision-making, insights and problem-solving, is definitely a strong value proposition for financial practitioners of the digital age. Find out more about Data-Driven Decision Making, as and other key Future-Enabled Skills for Financial Practitioners, via our Learn@IBF mobile app.