January 22, 2014 - A new piece of research from GreySpark Partners, a capital markets consultancy, examines the strategic principles of data management that are necessary for investment banks to stay competitive as increasing volumes of data are created by trading activities and client interactions.

Strategic data management – using data to gain a competitive edge – is an imperative that, if ignored, will threaten a bank's survival in the years to come. This report, Strategic Imperatives for the Data-driven Bank, explains how data must become an asset and how this data asset, if properly managed, can create competitive advantages.

Banks must act now to implement a dynamic data management strategy to prepare for the shift from relationship banking to information-driven banking. The sooner a bank begins implementing its data strategy, the easier it will be for that bank to affect this shift. Increases in the volumes of data seen in recent years will not abate, so it is critically important that banks carefully develop a strategic response to the organisational and technological pressures that the data creates. For a bank, having a strategy to manage non-linear increases in the amount of data created requires the ability to leverage reliable, timely information in order to increase revenue, facilitate change and cut costs. This report sets out the essential objectives for implementing a new type of data strategy, guiding organisations through core principles that they should adhere to in order to succeed.

Bradley Wood, GreySpark partner and principal report author, said: "For years, data was viewed as an IT problem, with business leaders failing to grasp the importance of data on profitability and market share. Those who have not jettisoned this legacy thinking are in for a rude shock as they are routed by competitors who not only understand the data-driven world we now live in, but have the nous to exploit it. This research will help banks grappling with this thorny challenge as they seek to compete in a post-Dodd-Frank world."

Anna Pajor, a senior consultant in GreySpark's Capital Markets Intelligence Practice and co-author of the report, added: "Implementing an effective data strategy will require both investment and a potentially painful cultural change. Despite this fact, GreySpark sees an urgent need for banks to instigate these changes now. Shockingly, only half of the banks we surveyed are in the process of introducing comprehensive, modern, business-lead data governance principles. For those who have set this process in motion, the results of this thinking are visible in their ability to scale their businesses and to improve client-centric services in an industry where a renewed interest in the client is long overdue."

Strategic Imperatives for the Data-driven Bank is the first in a series of reports that will provide banks with guidance on how to implement the strategic use of data in capital markets businesses. This first report guides banks though GreySpark's principles for the strategic, business and technology thinking needed to ensure the exploitation of data to gain a competitive advantage. The second report in this series will focus on how banks can recast their data management approaches within the context of customer-centric, flow businesses. Technological considerations are discussed in the third report, where architectural approaches needed to realise these new types of data strategies are reviewed.