Banking executives are generally frustrated by the lack of efficient and effective Management Information (MI) that they receive to run their businesses in Asia. Sources of this frustration include MI duplication which often exists across business functions; laborious and error-prone manual production of MI; production of reports that lack focus or insight; gaps in MI such as missing HR and/or sales data; and poor MI storage, governance, and delivery.
Banking executives in Asia want to frequently receive summarised snapshots of relevant and standardised MI, governed by a structured distribution process that incorporates a formalised feedback loop to all business lines. There is low overall consumer satisfaction with MI within the Asian banking industry driven by three attributing themes: Inconsistent MI, Untimely MI, and Irrelevant MI. Banking executives should receive appropriate MI to make effective decisions and run their businesses without wasted effort on redundant MI activities.
Inconsistent MI and a lack of ‘one version of the truth’ is a recurring concern among Asia-based banking executives. A bank in Singapore suffers from poor MI quality which has led to a lack of trust during data interpretation. The producers of MI must understand the business and reasons why core information is required.
Consistency in the approach and presentation of MI is also important to ensure that data is anaysed and used correctly. Business departments require tools and processes to ensure that the data they provide to executives is consistent (e.g. business performance results as calculated by Finance and independently by geographical operations departments). A multitude of independent MI producers leading to a lack of a single source of truth is a recurring cause of MI inconsistency across the market.
We frequently hear about data not being readily available and unreliable processes and systems for the conveyance of MI. Some banks in Singapore manually load MI components into systems and subject data to manual manipulation (e.g. to resolve reconciliations) which delays MI and subjects it to error risk. Data integrity steadily decreases when figures are manipulated by numerous people.
There is also a strong correlation between the value of MI and the rate in which it is received by its interpreters due to quick fluctuations in exposures, exchange rates, and so forth. Furthermore, if related MI is not delivered at the same time, its meaning can be diluted driving further inefficiencies.
A key contributing factor causing untimely MI is there being too much data produced and disseminated. Producers must understand the usefulness of the reports they are producing so that they can focus on the timely production of MI that increases business performance and/or better supports the making of important decisions.
MI consumers tell us that they are often required to sift through irrelevant data in order to find MI that meets their strategic needs. Occasionally, executives receive raw data and not the organised MI they require to quickly and easily digest and analyse.
Banks in Asia need to produce less data reports and more analytically enabled MI. MI and data should be governed in such a way that ensures standardisation of geography, country, product, etc. reporting.
Reviews of bespoke MI produced by most banks reveal that not all legacy MI is actively used to manage businesses. Key indicators of potentially irrelevant MI include MI lacking forward forecasting; reports containing duplicated data; geography specific reports with no link to overall regional strategy; raw data dumps; etc.
The solutions to MI effectiveness and efficiency issues are not all costly and time-consuming. Certainly central data warehouses improve MI production and interpretation dramatically, however other more immediately achievable opportunities to improve MI production and delivery exist.
All functions within banks should understand the MI needs of their executives. Identifying critical MI and rationalising non-critical reports and associated processes is equally important.
Banks need to assess the effectiveness and efficiency of their critical reports; identify data, structural and other content design improvements, and tailor solutions to improve MI automation, accessibility, and usability. Once solutions are implemented, banks must determine and implement appropriate on-going MI governance.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Asian Banking & Finance. The author was not remunerated for this article.
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Ashley is a Deloitte Southeast Asia Consulting Manager with more than eleven years of experience in the global financial services industry. Ashley has worked with leading financial institutions and has gained international experience working across the buy and sell sides in Asset Management, Private Banking, Prime Brokerage, Investment Banking, and Hedge Funds. Ashley specialises in business strategy, regulatory transformation, and operational excellence.