Hakkoda, a cloud data engineering consultancy specializing in Snowflake, released its 2024 Financial Services & Insurance State of Data Report, surveying 145 director to CEO level data leaders from large financial services and insurance (FSI) organizations.
Artificial intelligence is poised to disrupt the financial services and insurance industry in a significant way in the next three years, with 97% of FSI organizations indicating that they believe generative AI will be important to their success within that time frame. Additionally, 81% of FSI respondents are confident that their organization’s data team can build the AI capabilities they need and that they have the infrastructure in place to support AI workloads, and 84% believe their teams also have the AI skills and expertise for successful implementation. However, only 26% of FSI organizations have defined generative AI use cases they are ready to implement. Critically, just 30% of surveyed FSI organizations have modernized their data stack.
Other Financial Services State of Data 2024 report findings:
- 70% of FSI organizations have yet to centralize their data on a primary cloud data platform
- 74% of FSI organizations intend to centralize in the cloud in 2024
- 38% of FSI organizations cite data monetization as a major challenge
- 53% of FSI organizations are outsourcing their data management
Financial services leaders report 136% ROI on their data investments and greater organizational data literacy than other industries, but their data infrastructure tends to lag behind other data-driven industries. Their data stacks are reportedly less scalable and efficient than other sectors surveyed, with only 8% of FSI leaders reporting their data stores and pathways are “extremely efficient and scalable.”
- Financial Services Falls Behind the Modernization Curve — Only 30% of financial services and insurance organizations have centralized their data on a cloud platform. The FSI sector is also less likely to use data lakes, with only 37% of FSI leaders reporting that their business had one in current use. Among Director to Senior Director level FSI data leaders, 58% saw building and maintaining advanced analytics capabilities as a major challenge for their operations in 2024.
- Room For Growth in Key Generative AI Applications — 51% of FSI leaders report that their company is using generative AI for documentation and metadata descriptions. Compared to other industries, they are less likely to be using generative AI tools for data governance and compliance (43%), data cleaning (43%), data cataloging (41%), schema matching (38%) and AI copilots (31%).
- Financial Services Needs Help with Data Monetization — Only 22% of FSI organizations are currently monetizing their data, with 93% planning to monetize within the next two years. Data monetization was reported as a major challenge by 38% of FSI leaders (trailing only Healthcare among industries surveyed). FSI organizations report low confidence in the efficiency and scalability of their data stacks., and 70% of FSI organizations had yet to centralize their data on a primary cloud platform in 2023.
“The State of Data 2024 report shows that financial services organizations are eager to modernize their data stacks, implement generative AI, and tap into data monetization,” said Anand Pandya, Global Head of Financial Services at Hakkoda. “FSI data leaders know they need help from modern data experts who understand their industry to achieve their data goals. Capturing the opportunities presented by powerful new data-driven technologies requires rapid execution along a long-term roadmap to show that tomorrow’s capabilities are ready today.”
A detailed executive summary and the Financial Services State of Data 2024 report is available here.
The Financial Services State of Data report was drawn from a study conducted on behalf of Hakkoda by Lawless Research in December 2023 as a blind survey of 500 director to CEO level data leaders from large organizations across major industries. 20% of respondents came from organizations with less than $500M annual revenue; 29% with $500M to $999.9M annual revenue; 37% with $1B to $9.9B annual revenue; 14% with $10B or more annual revenue.
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