The Intersection of Financial Institutions and Technology Leaders

How to Start Building a Data Strategy

By David Heneke

A common discussion in banking today is around the use of data.

The topic can be overwhelming, particularly when you think about the thousands of daily transactions that occur in a community bank. To start making better use of its data, your bank can begin formulating a strategy around data and how it can be leveraged to support customers and internal decision making. Having a clear strategy also provides direction on resources needed, including seeking assistance from external parties or working with current internal resources.

Build a Data Strategy First
Before you can decide on the tools and resources necessary to fully utilize your data, you must first build a strategy. A comprehensive data strategy should include both internal and external needs and how best to deliver on those expectations. Ask these questions when building your external data strategy:
• Are your customers looking for financial information to help them make better financial decisions? If so, how does the bank deliver this real-time data through the mobile banking application or internet banking platform?
• Do you want to provide customers with product offers in real time that may address their financial needs?
• Do you want to incorporate predictive analytics in delivering information to your customers?

On the internal side, consider these questions:
• How does the bank currently pull data for reports used in management decisions?
• How much time and effort is spent generating internal reports?
• Could the efficiencies the bank gains by utilizing automated tools to aggregate information outweigh the costs?
• Can the bank analyze the profitability of individual customers?
• Are there opportunities to cross-sell products and services based on customers’ financial position?

These are just a few questions that can help your institution formulate a data strategy. As with other areas of your bank, this strategy should drive the resource allocation. The products, people and technology solutions the bank ultimately invests in to execute the data strategy should be explicitly aligned with the overall strategy to help minimize potential waste of financial resources.

Allocate Resources
Once you have developed the bank’s data strategy and its initiatives, you can next identify the tools and individuals needed to execute them. Perform a cost-benefit analysis when deciding how to accomplish the bank’s goals. First ask whether the bank can manage this internally, or if you’ll need to enlist external help.

Start by evaluating your institution’s internal capabilities with the technology you’re currently using. A common tool most community banks have access to is the Microsoft Office suite of products. Over the past several years, Microsoft Excel greatly expanded its capabilities to include data analytics tools that allow users to automatically import data from a variety of sources. Once you set up this automated import functionality, you can generate dashboards that give real-time information about your bank. This could be at a bank-wide, business unit or at the customer level, depending how deep you want to dive into your data, based on your strategy.

If the time and effort needed to achieve your strategic objectives through internal means is cost prohibitive, your bank should explore working with external parties that can help get your strategy going. External enterprise-wide dashboarding tools that connect to the core system and generate daily reporting on critical banking metrics can be a great way to jump-start your data strategy.

Use Your Imagination
The banking industry has an incredible advantage over many other industries when it comes to data, since it includes insights to customer financial habits and trends. This information is extremely valuable not only to your bank, but also to your customers that value financial well-being.

Harnessing the data at your bank to deliver actionable insights for employees and customers is a great way to build long-lasting relationships and deliver true value.

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting, investment, or tax advice or opinion provided by CliftonLarsonAllen LLP (CLA) to the reader. For more information, visit

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