Breaking down data silos: 5 key benefits for professional and financial services firms

Data silos are an all-too-common but increasingly unsustainable problem for many professional and financial services firms. Silos occur when an individual, department, or business unit stores and manages their own data separately, without sharing or integrating it with other data sources and teams. This can lead to a number of problems, including resource-draining inefficiencies, increased costs, subpar client and investor experiences, and a lack of visibility into critical business metrics.

Today’s private capital, investment, legal, consulting, and accounting firms can’t afford the lack of insight and agility that silos cause. With technology-led change rapidly transforming firms’ operating landscape, those that continue to run based on traditional business and operating models are at high risk of becoming obsolete without connected data and the advantages it confers.

Knowledge-based firms need to leverage the power of technology to connect their data and facilitate collaboration among teams, leaders, functions, departments, prospects, clients, investors, contacts, and every other touchpoint and stakeholder involved in their business. Firms that successfully implement connections between their front-office and middle-and back-office teams and systems can significantly improve communication, collaboration, planning, and operations.

Improved efficiency

One key benefit of removing data silos is, of course, improved efficiency. When data is siloed, it can be difficult for professionals across departments or business units to access the information they need in sufficient time to perform their tasks and meet their responsibilities. This can lead to delays and redundant effort, as well as increased costs associated with remediating duplicative data and manually transferring information between separate systems.

By breaking down data silos and integrating data firmwide, professional and financial services firms can improve communication and collaboration between departments, resulting in faster, more efficient and effective decision-making. By migrating from manual, spreadsheet-based processes to more integrated, automated systems solutions, firms can optimize pipeline management, business development, invoice tracking, conflicts clearance, and more. They can determine the status of any client interaction, the stage of every deal in play, and problems and opportunities that need immediate attention.

Consider this example: A partner-led firm is getting ready to release a bill that includes a discounted rate negotiated between a partner and a client. With connected technology designed for such scenarios, this key update can be entered, approved, and shared with the relevant systems and teams at the earliest point possible so the bill can be generated correctly the first time.

Without this kind of integration, however, it’s more likely that the discounted rate won’t be entered into the relevant financial system (FMS), it won’t be reviewed and approved by the proper stakeholders, and the bill will be raised without the application of the discounted rate as agreed. The back-and-forth both within the firm and with the client wastes time and increases the risk of impact on the client relationship and further write-off rates.

Increased visibility

Siloed data makes it more difficult for dealmakers and professionals to fully understand and support their client relationships and sales and deal opportunities. Disparate data also makes it difficult for firm leaders to gain a complete and accurate understanding of firm performance and areas of potential growth. These shortfalls can lead to missed opportunities, poor decision-making, a lack of accountability, unnecessary or inaccurate miscommunication with existing clients, and even friction between departments and business units.

By removing silos, professional and financial services firms can gain increased visibility into business opportunities and performance metrics, allowing leadership to make better decisions and identify areas for improvement. For example, investment bankers can combine their firms’ internal research with third-party data sets to improve their origination efforts and attract the right buyers, while partners at private capital markets firms can improve their coverage, deal sourcing, and underwriting.

Or consider a business development associate and a client-relationship manager working collaboratively on a prospective client opportunity. After this team of two meets with the client to understand their service needs and pitch for the work, they update their firm CRM system with comprehensive notes outlining the client needs, projected fee levels, and internal resources required to deliver. At the appropriate time, an administration support team member commences the client-intake and risk-review processes.

With connected technology, each designated team member can have role-specific access to relevant, up-to-date information, streamlining efforts, saving time, and ensuring a cohesive and frictionless experience. Without this capability, however, the following scenario is much more likely: The support team member can’t access the new data in the CRM and must resort to painstakingly completing the client onboarding information based on email correspondence shared with them following the pitch-planning process. Important key information is lost throughout the process, leading to repeated back-and-forth exchanges with the previous two team members, who become frustrated since they’ve already added their comprehensive outlines to the CRM. With the data siloed in disconnected systems, downstream teams have no visibility into vital, accurate information that supports appropriate risk checking and billing set-up and ensures that profitability projections are accurate.

Greater agility

In any dynamic, highly competitive industry, the ability to quickly and effectively respond to changes in the market is crucial. Siloed data hinders this critical capability by making it difficult for firms to quickly identify and take advantage of new opportunities and to recognize and proactively address threats

With connected data, however, professional and financial services firms can become much more agile and responsive. Financial services, legal, consulting, and accounting firms all become better equipped to seize high-potential opportunities, surface and meet client needs for new service offerings, manage risk, and stay on top of continuously changing regulations and guidelines.

Consider this potential predicament: A firm that regularly accesses third-party data in order to validate and govern data entering its systems has set up ongoing monitoring checks and alerts to ensure that trigger events are caught at the earliest opportunity. The system releases these alerts via email to a risk team member for review and subsequent email communication to team members responsible for client onboarding analysis. Then one day, that risk team member is unexpectedly absent, causing a delay in the release of the results.

Meanwhile, this firm’s more advanced competitors have moved away from relying on email correspondence and toward the integration of key data points and organizational corporate tree information between third-party providers and the client onboarding system. All of these firms’ designated professionals can gain instant, automated access to the results — enabling their teams to take a more nimble approach, and giving these firms a significant advantage over less sophisticated competitors.

Enhanced client service

When data is siloed, it can be difficult for different departments and business units to access the information they need to provide high-quality client service. This can lead to delays, confusion, and frustrated clients who tire of experiencing mediocre outcomes, receiving inaccurate bills and reports, and fielding high volumes of unnecessary communications repeatedly requesting or providing the same information

By integrating data across the organization, professional and financial services firms can significantly improve client service and engagement with tailored offerings and increased client satisfaction through compliant, accurate billing. They can also create accurate client profiles that let them proactively manage their client lifecycles and better identify top client issues and needs.

This personalized approach to client relationship management, facilitated by connected data and systems, empowers firms to better determine how to provide consistent quality, reduced risk, and better services, experiences, and outcomes.

Consider the experience of a client that approaches a firm for a particular engagement. During the course of discussions, the assigned client relationship manager, equipped with connected technology and data, accesses the firm’s industry-specific CRM system and discovers that a senior colleague in another jurisdiction has recently connected with the same client on another, unrelated piece of work. These two firm professionals will both have insight into the client’s request for services, and they will enjoy an improved ability to share information on their respective opportunities, collaborate on the client relationship, and further expand the firm’s service offering.

Streamlined compliance

One of the greatest challenges facing all firms is the constant need to monitor and comply with rapidly evolving risk and due diligence requirements. Siloed data only makes the job harder, as it prevents firms from accurately assessing risk and can ultimately lead to reputational and financial damage.

Anti-money laundering (AML) and customer due diligence (CDD), with their ever-changing regulations and ever-evolving best-practices guidance, places considerable pressure on firms, staff, and the systems they use. By connecting data and working practices with automation, integrations, AI, and cloud-based solutions, firms can streamline AML and CDD management and better evaluate new business, monitor relationships, swiftly identify risk trigger events, and demonstrate compliance. With the right data, firms can make more informed decisions about whether to onboard a client, and whether the risk rating and revenue generated are aligned with firm strategy.

Interconnected data: A must-have, not a nice-to-have

For professional and financial services firms, removing data silos is critical in today’s fiercely competitive marketplace for improving efficiency, visibility, agility, client service, and regulatory compliance.

By breaking down barriers and integrating data across their organizations, professional and financial services firms can gain more comprehensive views of firm performance, make more informed decisions, identify areas for improvement, and respond quickly to changes in the market. At a time of constantly changing geopolitical events and regulatory oversight, connected data can also make the challenge of compliance significantly less challenging

Firms can use integrated data to develop enhanced business development strategies and capabilities with data-driven initiatives like strategic key-client programs and relationship analytics. Equipped with accurate, up-to-date information, firm professionals can develop stronger, evidence-based business cases and storytelling; build greater trust; cross-serve clients; and deliver white-glove experiences for their most valuable relationships, ultimately improving client satisfaction and retention.

Simply put: Accurate end-to-end systems data reporting makes all the difference — between streamlined versus cumbersome processes, accurate versus flawed decision making, nimble versus encumbered action, satisfied versus frustrated clients, and streamlined versus impaired risk assessment.

To learn more about how today’s leading professional services and capital markets firms are enabling data-informed decision making at all levels, download our white paper.