The new frontier for data: Hyper-precision and hyper-customization

During the past two decades, we’ve moved from storing most business data in traditional paper reports to saving — and distributing — data in computer files, the cloud and even the metaverse. That’s why it’s important for business leaders to ask practical questions about data: First, what do data changes mean for our organization? Second, how will these changes affect our employees, executives, business owners and consumers??

Last year, PwC did a keyword analysis of annual reports for 1,000 companies globally, and one consistent takeaway is that data features more prominently in presentations to investors today than it did five years ago. Currently, companies typically refer to data an average of 48 times in their annual report, whereas five years ago, data was rarely mentioned in those reports.?

The difference? It has become increasingly important for companies to have a strong grasp on organizational data and to use it to benefit their business, remain competitive and achieve success. As a result, even traditional companies have migrated from the paper world into the digital one.

Digital players move quickly

As PwC’s analytics and insights leader, I often compare long-standing banking institutions — large retail banks that have been in existence for many years — to digital banks — new players that have been around for only a few years. The former group is weighed down by legacy architectures, systems and tools. Plus, since they tend to be large institutions, any change they make is going to have a significant impact on their set-in-stone processes. This generally makes these enterprises slower to change than banks that are digital natives.

The new digital players are not bogged down by legacy architectures, so they don’t have to be concerned about the lack of compatibility between new and old systems. Consequently, these digital companies can move quickly, make fast decisions and push boundaries. And they tend to be hungry for growth, so they're often eager to compete with traditional banking institutions.?

The new bank players might lack market share, and they don’t have the large database of customer data, behaviors or patterns that the big players have. However, they do have a simplified cloud-based architecture, and they usually won’t be inhibited by a lack of data. Digital natives, as well as many big players, are selling data for profit, or are part of data-sharing consortiums that exchange data.?

Let me share an example that builds upon my big legacy bank versus digital bank story. A Fortune 500 bank and a digital bank purchased the same data set that provided a 360-degree customer view provided by a technology vendor.?

The Fortune 500 bank decided that in addition to the data set obtained, it would cross-check the data set with what it already had — the customer master database. Using findings from the cross-check, the bank would search patterns to find similarities and would then target customers based on their demographic preferences.?

In contrast, the digital bank took the data set as-is and used that information to develop a new product that it thought would be appealing to the majority. It then launched this product to its customers.?

Both companies boosted innovation by going beyond big data and looking at what’s called “thick data” to influence product and service usage through human-centric design. Big data is about capturing what people spend their money on, when they buy an item and how much they pay for it. Thick data focuses on human behavior and digs deeper into people’s motivations for buying something and the ways they use a product.

Which approach is right? Well, they are both right, but because of the different approaches, their outcomes will also be different. This is the kind of differentiator that can get unique insights from data and can drive strong results.?

It is important for data professionals to share what they work on because in this world of hyper-precision and hyper-customization, there are endless possibilities on what we decide to do with our data. To bring value to consumers, it makes sense to have differentiated approaches that accentuate our capabilities, rather than standardized approaches that are similar but are just slapped with two different company names.?

Winning the power struggle

The power struggle that is going to distinguish the winners from the losers will be based on how data will be used as a competitive advantage. The questions are no longer “Do you have the data?” or “Are you analyzing your data for insights?” Today, questions focus on “How are you using the data differently than your competitors?” and “How are you acting on data insights in compelling ways?”?

Data professionals talk about data storytelling, data-driven decision-making and data monetization. But if all of us are talking about the same areas, what differentiator can put a company at the top??

Truthfully, most organizations are still in the early stages of unlocking the potential of data. While we’ve moved out of data collection for the most part, we are now at the stage of improving data collection, improving data quality, and ensuring that our data is adhering to privacy regulations and other compliance requirements.?

After that stage, innovation is going to be the differentiating factor: Once data has been collected, improved and ready for use, what analyses will you perform and who will do it? Also, to what extent will you analyze the data in order to generate unique insights that will differentiate your company??

Data’s impact on people and companies?

As our perception of data’s potential evolves, it will impact people, organizations and processes.?

When PwC did a chief data officer (CDO) survey last year, we found that the top two industries with CDOs were banking and insurance. Surprisingly, almost half of the CDOs, regardless of industry, are still not C-suite members. This is a key change that will be needed to get the right level of attention for data.

Some CDOs focus on data quality because their company is drowning in unstructured “messy” data. Others focus on extending their AI capabilities to create a data fabric: an action-ready, 360-degree view of all data that touches their organization. Some choose to combine their data strategy with both technology and compliance strategies. Regardless of the approach taken, the goal should be to put data in front of the right people at the right time to produce data-driven decision-making that benefits the business and its customers.?

Ideas, innovation and integrity

I want to end this blog with three pieces of advice:

1. Remember that you are not alone facing change and evolution in the data world. You’ll have advisors to play devil’s advocate, push boundaries and be your innovation partner to bring new ideas that can show you what data can do for your business.

2. To ensure that you meet customer demands, you should differentiate what you’re doing with data to gain a competitive advantage. Study your competition — what works and doesn’t work — to determine where you should invest your energy to gain a competitive advantage.?

Get plugged in through conferences and consultancies that produce industry surveys, benchmarks or assessments. For example, PwC publishes annual C-suite surveys, including ones about CDOs.

3. Always remember that customer trust is hard to build but easy to lose. So, as you evolve your data practices, your company should always behave with integrity when handling data.?