Driving efficiency in Financial Services through strategic data procurement

In financial services, data is not just a tool, it's the lifeblood that powers every decision. However, navigating the complexities of data procurement can feel like a maze. The current landscape is riddled with challenges, most prominent among them being the lack of transparency in data pricing from data bureaux.?

The opaque pricing models and disparate costs can throw a spanner in the most well-oiled procurement mechanisms. But the significance of efficiency in this industry cannot be overstated.?

Enter: Strategic data procurement. The process of comparing and measuring data against an industry standard not only provides valuable insights but also pinpoints areas of improvement in data procurement.

Let’s take a closer look at how you can drive efficiency through strategic data procurement.

The power of data in Financial Services

The quality of financial services data holds the potential to influence credit decision making significantly. High-quality data brings clarity, reduces risks, and ensures precision in decision-making processes. It is the difference between approving a credit request that will default and one that will bring in returns.

But harnessing the power of high-quality data comes at a cost. Every search, every data point procured, carries a price tag. And while the benefits are numerous, it's essential to understand the importance of saving money on data and searches for improved efficiency.?

And that's where strategic data procurement guided by data benchmarking steps in, providing a roadmap for cost-efficient, high-quality data acquisition.

Unveiling data benchmarking

Data benchmarking is a strategic process that compares your data procurement processes, cost, quality, and accuracy against industry standards and best practices.?

It’s not just about understanding where you stand. It's about illuminating the path forward and providing actionable insights to elevate your strategies. And make significant savings.?

In the financial services sector, data benchmarking holds substantial significance. Given the sector's reliance on data for credit decisions, regulatory compliance, and strategic planning, having a comprehensive understanding of how your data practices compare to industry peers is indispensable.?

It ensures you are not just keeping pace with the industry, but actively seeking to enhance your data practices.

Leveraging data benchmarking

Data benchmarking is not just about ensuring you are par with industry standards. It's a tool that can actively drive cost savings and improve data accuracy. It provides a granular understanding of data costs, shedding light on areas of overspending. This enables companies to negotiate better contracts with data bureaux, ensuring you get the best value for your investment.?

Improving data accuracy is another compelling reason to leverage data benchmarking. By comparing your data's accuracy against industry norms, you can identify gaps in your data quality and take steps to rectify them. This translates into better credit decisions, risk assessments, and overall operational efficiency.

The importance of data accuracy was further underscored by the FCA's credit information report, which highlighted discrepancies in data held between bureaus. These disparities can lead to inconsistencies in credit decisions and pose a substantial risk for financial service providers. Data benchmarking can help identify such discrepancies and drive efforts towards ensuring data uniformity across different bureaux.

In a nutshell, data benchmarking isn't just a measure of where you stand - it's the beacon that lights the way towards improved efficiency, cost-effectiveness, and data accuracy in the financial services sector.

Case study showcasing the value of data benchmarking

Let's look at a real-life example to illustrate the power of data benchmarking.

PurplePatch worked with a major player in the UK financial sector, which was grappling with escalating data procurement costs. Their lack of insight into market rates led to unnecessary expenditure and compromised data quality.

Upon implementing data benchmarking with PurplePatch's expertise, they were able to analyse and compare their data procurement processes against the best in the industry.?

This gave the bank a clear understanding of their position relative to their peers and an insight into areas where they were overspending or underspending.

This holistic benchmarking process identified several opportunities for cost-saving, including areas of duplicative data purchase and suboptimal contract terms with their data bureau.?

As a result, the bank managed to reduce their data procurement costs by a substantial 30% in the first year of implementation. Moreover, the benchmarking process brought to light gaps in their data quality, driving improvements in data accuracy and thereby enhancing their credit decisioning process.?

The impact was substantial - fewer bad debts, improved regulatory compliance, and overall, a more efficient operation.

With this in mind, let’s take a look at how you can put this into practice too.?

Implementing data benchmarking in your organisation: A Step-by-Step Guide

Integrating data benchmarking into your organisation may seem daunting at first, but with the right approach, it can be seamlessly integrated into your existing processes.?

Here's a step-by-step guide to implementing data benchmarking for data procurement in your organisation:

1. Understand your current position: The first step in any benchmarking process is understanding where you stand currently. Specialist experts like PurplePatch can analyse your data procurement processes, costs, quality, and accuracy in depth. This sheds light on any inefficiencies, discrepancies, or areas of improvement.
2. Identify key metrics: Benchmarking is all about measuring performance. This is where we identify the key metrics that are crucial to your data procurement process. These might include cost per data point, data accuracy, data completeness, and so on.
3. Leverage industry standards: To compare your performance, you need to know what the industry standards or best practices are. Here, we’ll leverage our information about the average data costs, the expected data accuracy levels, and other relevant metrics in your industry.
4. Compare and analyse: Next up, we compare your performance with the industry standards. This will give you a clear picture of where you stand and highlight areas where you are excelling or lagging.
5. Identify opportunities for improvement: Data benchmarking isn't just about knowing where you stand; it's about identifying opportunities for improvement. You can use your comparison analysis to pinpoint areas where you can save costs or improve data quality.
6. Implement changes: Based on your analysis, implement the necessary changes in your data procurement process. This might involve renegotiating contracts with data bureaux, investing in new data or technology, or refining your data procurement strategies.
7. Monitor and adjust: Benchmarking is an ongoing process. After implementing changes, you should continuously monitor your performance and adjust your strategies as needed.

Remember, the goal of data benchmarking is to drive efficiency and cost-effectiveness in your data procurement process.?

However, if you’re going it alone, the process can be time-consuming and complex.?

Working with a data benchmarking expert like PurplePatch can simplify this process and ensure accurate and useful results. We can help you understand your current position, provide insights into industry standards, and guide you in implementing effective improvements.

Realising the potential of strategic data procurement

Through this exploration of data benchmarking in financial services, one thing is clear - benchmarking is imperative for efficient, strategic procurement.

Benchmarking provides unprecedented visibility into your organisation's data costs, quality, and accuracy compared to industry standards. These insights shine a light on opportunities to enhance procurement practices.

Armed with benchmarking, procurement teams can:

• Renegotiate inflated contracts based on true market pricing
• Pinpoint areas for improved data quality and coverage
• Make informed investments aligned to business priorities
• Develop competitive procurement strategies

Ultimately, benchmarking allows you to evolve procurement from a cost centre into a value driver. Strategic data procurement enabled by benchmarking influences better credit risk decisions, controls expenses, and elevates procurement's strategic influence.

However, unlocking the potential of benchmarking requires taking the first step. While the path forward may seem murky, remember - you don't have to navigate alone. Lean on experts like PurplePatch to provide guidance and support through benchmarking and beyond.