The 2024 Financial Services and Insurance State of Data Report has been produced by Hakkoda, a cloud data engineering company that specializes on Snowflake.

145 of the 500 director to CEO-level data leaders surveyed for the report work for large financial services and insurance companies. The report identifies the main obstacles, goals, and chances facing the FSI sector until 2027.

In the next three years, artificial intelligence is expected to have a major impact on the financial services and insurance sectors. Compared to organizations in other industries, financial services and insurance organizations are more likely to use GenAI for documentation and metadata generation. According to the report, generative AI will be crucial to the success of 97% of FSI organizations in that time frame.

Several important report conclusions

81% of FSI participants said they have faith in the data team at their company to build the essential AI skills and to validate that they have the infrastructure in place for AI workloads. In a similar vein, 84% think their teams have the necessary AI expertise for successful deployment. Remarkably, just 30% of FSI organizations have changed their data stack, and only 26% of FSI entities have developed meaningful generative AI use cases.

Additional conclusions from the Financial Services State of Data 2024 report:

• 70% of FSI organizations still don't have their data centralized on a main cloud data platform.

• on 2024, 74% of FSI organizations plan to centralize on the cloud.

• Data monetisation is cited by 38% of FSI organizations as a significant problem.

• For 53% of FSI organizations, data management is outsourced.

CEOs in the financial services industry report a 136% return on investment from their data projects, and they are more data literate than executives in other industries. They lag behind other data-centric businesses, meanwhile, in terms of data infrastructure. According to reports, just 8% of FSI executives characterized their data storage and routing as "extremely efficient and scalable." This suggests that their data stacks are less scalable and efficient. They're "less likely to have centralised their data on a primary cloud platform than other industries; and are less likely to be using cloud data stores, warehouses, and data lakes in general" .

• Only 30% of financial services and insurance companies have centralized their data on a cloud platform, indicating that the industry is "less modernized." Data lakes are likewise less common in the financial services and investment (FSI) industry; according to 37% of FSI leaders, their company currently uses one. For their operations in 2024, 58% of FSI data executives at the Director to Senior Director level viewed developing and sustaining advanced analytics skills as a significant issue.

• Potential for expansion in important generative AI applications: according to 51% of FSI executives, their organization uses generative AI for metadata descriptions and documentation. Their use of generative AI solutions for data governance and compliance (43%), data cleansing (43%), data cataloging (41%), schema matching (38%), and AI copilots (31%) is lower than that of other industries.

• Financial services and data monetisation: 93% of FSI organizations want to monetarise their data within the next two years, compared to just 22% who are doing so now. Only the healthcare industry was cited by 38% of FSI leaders as their top difficulty when it came to data monetisation. In 2023, 70% of FSI organizations still hadn't centralized their data on a main cloud platform, and FSI organizations express poor trust in the effectiveness and scalability of their data stacks.

Anand Pandya and Data Situation 2024

Anand Pandya, Global Head of Financial Services at Hakkoda, stated, "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 monetisation."

To meet their data objectives, FSI data executives are aware that they want assistance from cutting-edge data specialists who are knowledgeable about their sector. In order to demonstrate that tomorrow's capabilities are available today, swift execution along a long-term roadmap is necessary to seize the opportunity given by potent new data-driven technologies.

"Organizations providing financial services are aware of the value of their data, but they have commoditized their systems and technology in order to maximize that value. This indicates that each recognized data transformation project has a corresponding business justification, and the data team receives support from the outset. Delivering a genuinely remarkable return on investment from their projects is therefore feasible. However, because they are harder to prove return on investment for, financial services firms are also deprioritising some of the most basic but crucial modernization initiatives. This indicates that while their short-term performance indicators and success rates appear remarkable, as companies continue to rack up tech debt, their long-term forecasts become ever more erratic.

The Financial Services State of Data 2024 study and a comprehensive executive summary may be found here. The study done by Lawless Research in December 2023, on behalf of Hakkoda, involved a blind survey of 500 directors to CEO level data executives from significant organizations across different sectors. The study's findings were used to create the Financial Services State of Data report. Less than US$500 million in sales each year accounted for 20% of replies, followed by US$500 million to US$999.9 million, US$1 billion to US$9.9 billion, and US$10 billion or higher.