The role of Chief Data Officer, or CDO, was born from the financial crisis of 2008 and 2009 from increased regulatory and compliance reporting demands. According to a recent Harvard Business survey, 71 percent of firms in the financial services industry at a global level are exploring Big Data and predictive analytics, and 70 percent report that Big Data is critically important to their firms. By late 2015, half (54 percent) of firms in the industry had appointed a Chief Data Officer.
Financial data is no longer measured in terabytes or petabytes, but in zettabytes (a billion terabytes). This vast amount of data comes from a myriad of internal and external data sources varying from a complex network of transactional data to social engagement data used to personalize the customer experience. This creates a challenge for financial institutions to leverage this for competitive differentiation while at the same time complying with a long and ever-growing list of regulations. On top if that, business continuity and security are of utmost concern.
The challenge for the financial services industry is to best utilize breadth and depth of data available to satisfy demanding regulators, as well as to improve services for customers. The role of the Chief Data Officer is to police the integrity of the numbers while unlocking the insights within to better understand customers, competitors and employees. This represents a significant opportunity to gain competitive advantage which is why so many CDO’s are entrusted with this role at a strategic level to carry out the vision and chart a future that drives business value.
As Big Data becomes important in other industries, the CDO role has expanded beyond financial services. In recent years, more companies in the Fortune 1000 have seen the value of adding a Chief Data Officer. According to a NewVantage Partners 2016 Big Data Executive Survey, 54% of firms surveyed report having a Chief Data Officer, up from 12% in 2012. Regulated industries such as life sciences and health care are leading this trend. Today, the Chief Data Officer has become the voice and the champion for Big Data projects in Fortune 1000 firms.
As more firms become reliant on Big Data for differentiation and consumer satisfaction, it’s essential that they have a plan to manage data carefully because disruptions could be costly from not only a regulatory perspective and lost revenues, but also a loss of reputation, which makes the Chief Data Officer role key across many segments of the business.
To read about how a global financial institution protected its data and reputation with a well-prepared business continuity and data recovery plan, download our case study.