Delivering better customer experiences requires a comprehensive approach to data and knowledge management. And adopting a single source of truth approach as part of a wider digital strategy can help financial firms better meet rising customer expectations by being able to access up-to-date and accurate information quickly.
This article at a glance:
- A single source of truth (SSOT) explained and why it matters in financial services.
- The benefits of adopting a single source of truth philosophy with your data.
- Possible outcomes for firms failing to adopt this philosophy.
- Indicator of the need for change
- Challenges in adoption
In a digitised world where customer expectations are rising, omnichannel experiences are expected, and personalisation is standard practice, data is the key to satisfying customers. Yet, to be able to delight the customer at every touch point, an integrated and robust approach to data management is needed. And this is why a single source of truth (SSOFT) matters to data managers and leaders in financial services.
What is a single source of truth (SSOT)?
A single source of truth (SSOT) collates and manages data in one central location so that information can be shared appropriately to drive their business strategy. In doing so, everyone within the organisation can access the relevant information and trust that it is accurate, up-to-date and, therefore, reliable.
For this to manifest, organisations must implement good data and knowledge governance and ensure that the data is updated timely and accurately. And this hinges on adopting the right technology and implementing the right processes through a well-designed and executed digital strategy, combined with good knowledge management.
Why a single source of truth matters in financial services
Meeting rising customer expectations
There is a real sense of urgency in raising the bar in customer experience across financial services, not least because of the weight of regulatory changes, but the momentum and standards set in pure B2C industries are raising customer expectations.
Retail brands are investing in technology to deliver hyper-personalised experiences from the earliest touchpoints and through the whole customer life cycle to meet consumer expectations.
The result is that consumers expect a fast and friendly service across all organisations they interact with; they expect relevant experiences and expect brands to know where they are and what they want. Therefore, those who fail to adopt will fail to delight the customer. And from the customer’s perspective, why should their experience with their wealth management provider, retail bank, or pensions firm differ from their internet provider, fashion retailer or supermarket?
The ability to deliver this level of customer service hinges on the ability of the financial service provider to gather and manage customer data accurately.
The regulatory environment
In an environment where complex regulation plays significant roles, adopting a single source of truth can address many challenges that financial service providers face in shifting to a consumer-centric way.
The FCA’s Consumer Duty will demand to see evidence of good outcomes for consumers, meaning firms will need to adopt the right technology and procedures to not only facilitate this but to record and evidence it.
From tracking and recording the entire customer lifecycle and using that information to deliver better customer outcomes at every stage. To utilising customer insight to design better products for customers that result in better customer outcomes. Data is the key.
Benefits of a single source of truth to financial service providers
We have talked at length in previous articles about data as the key to transforming sales and distribution in FS. In our article How can financial service intermediaries build digital EQ and why does it matter? we highlighted the relevance of digital EQ for providers and why it’s needed to deliver meaningful experiences to customers1. and in Steps to digitising sales and distribution in pensions, investments, and wealth2, we outlined the role of technology in delivering a customer-focused system infrastructure that delivers better customer experiences.
And whilst both articles focused on systems, processes, and strategy, neither addresses in any depth the importance of a single source of truth and its role in delivering better customer experiences.
The benefits can be summarised as follows:
- Removed siloed working, which can facilitate a culture of collaboration and transparency.
- Removal of duplicate and inaccurate information and data.
- Offer agency to employees who can trust the information they are accessing.
- Enable front-line staff to access information quickly to deliver better customer service.
- Enable all teams to be ‘singing off the same hymn sheet’.
- Better decision-making from being able to access more accurate information.
- Leaders can build a complete and accurate view of business performance, therefore, make better decisions.
- Build a comprehensive view of business performance.
- Facilitate regulatory compliance concerning data management.
What is evident is that, beyond the sales and distribution function, operating a single source of truth is imperative for a customer-focused and efficient operation across all business functions.
Ignoring the need for change is not an option
In every industry, there are the early adaptors, the innovators and those hungry to grow or maintain market share. And with increasing competition in the sector, those hungry to grow will already reap the rewards of digitising their operations.
Adopting this digital-first mindset must be addressed, as without it, a firm cannot remain as competitive. What is more, failure to adopt a single source of truth would result in several unpleasant scenarios:
- Early adopters and smart followers will maintain market share by delivering superior customer experience.
- You will fail to keep pace with the market due to a lack of agility and efficiency.
- Without a SSOT, time is wasted, and poor decision-making will continue without access to accurate data.
- You will fail to operate a customer-focused sales and distribution function.
Signs your organisation needs to adopt a single source of truth
These signs indicate that your financial services organisation should adopt a single source of truth philosophy with your data:
- Different versions of the same information exist on various systems and data centres.
- It is difficult for employees to access the most accurate and up-to-date information.
- Even where knowledge and data are centrally managed, it is complicated and clunky to access and involves navigating away from your central work system and workflow – this can be time-consuming and frustrating for employees.
- Customers have been impacted by inaccurate information – often due to disjointed internal communication between departments.
Making change happen
Whilst the benefits are clear, there are other considerations and challenges that financial service organisations may need to navigate along the journey:
Achieving a single source of truth must be part of a broader digital strategy that drives digital adoption organisation wide. The degree of digital maturity of financial service firms varies from industry to industry. For those later to the party, there will be more to do to ensure digital is at the core of the business strategy.
Senior management needs to believe in the transformation and help facilitate the change by providing enough of the right resources to enable the change to occur in an agile and efficient way. A single source of truth cannot be applied by purchasing a single tech solution. It will be part of a sizable shift in how the financial firm manages its data and knowledge.
Knowledge management is also a key component, and achieving it demands good governance, yet it is one of the top three issues influencing company success, with only a small portion of businesses feeling ready to address it3. Technology is only one piece of the puzzle, too, as what is truly required is strong governance and a culture of knowledge sharing.
Those financial service providers who can successfully achieve digital maturity and acquire good acknowledgement management will see how it could help them fundamentally transform their business. And for some, help them embrace innovative and better ways of doing things4.
The challenge will lie in implementing the wider digital strategy and moving to a digital-first mindset which supports knowledge sharing.
1. Hesmur, How can intermediaries build digital EQ and why does it matter?
2. Hesmur, Steps to digitising sales and distribution in pensions investments and wealth.
3. Erica Volini et al., 2021 Deloitte Global Human Capital Trends: The social enterprise in a world disrupted, Deloitte Insights, 2020.
4. G. C. Kane, D. Palmer, A. N. Phillips, D. Kiron, and N. Buckley, “Achieving Digital Maturity” MIT Sloan Management Review and Deloitte University Press, July 2017