The Chief Data Officer (CDO) is a fairly new role within the C-suite that has been gaining traction within the financial services industry. CDOs are responsible for the enterprise-wide governance, quality, architecture, and analysis of data, as used to manage risk and create revenue-generating opportunities.
The rise of the CDO over the past 10 years has been spurred by the enormous amounts of transactional data collected-including, for example, the ubiquity of customer loyalty programs Regulatory mandates have increased the complexity of data management, forcing banks and other financial services companies to invest more heavily in the data arena.
How Do CDOs Add Value?
CDOs leverage enterprise data such as purchasing patterns, customer information, and scanned transactions to enhance the customer experience by delivering tailored products and services. CDOs are also tasked with creating business value, helping manage company-wide risk, reducing costs, and driving innovation by leveraging information as an asset.
The role and responsibilities of the CDO vary by organization and business strategy, reporting to the Chief Executive Officer or Chief Information Officer Within the position's range of responsibilities, a CDO adds value including:
A robust data governance program, including internal committees, policies, and processes to manage business information and a roadmap of communication channels the CDO will use to engage with lines of business and technology groups
Strategic data collection, driven by business objectives, defining which data is collected and how it is obtained, stored, and used across the organization. Data warehouses, integration tools, and platforms are mapped out and extended across the entire enterprise, and data architecture sets the model for how data is consumed.
Business insights, drawn from data analytics. An example of data analytics would be an Anti-Money Laundering scanning engine that helps a bank detect fraudulent transactions. Data can also be used to manage risk, meet regulatory requirements, and reduce costs and redundancies that can result from multiple isolated data programs across lines of business.
Automated business processes, turning data collected into marketing triggers.
CDOs are usually hired by companies that have not had a data strategy from the beginning. Technology companies such as ride-sharing and media-streaming enterprises, for example, do not have a CDO, although they have been data-centric from day one. An enterprise such as a large financial services company with mainframes and data rich environments could benefit from a CDO due to the sheer volume and complexity of its data assets.
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