"There's clearly a lot of activity that's going on," he relates. "If you think of consumers individually, the banks, whether it's data or technology or even the process or the people -- they still operate in silos." And those silos stand in the way of obtaining a view of the customer akin to what Capco's Small described as a single version of the truth.
And to Caldwell, this is the real problem. The age-old issue of separating products and channels is a greater weakness than ever under the supervision of the Consumer Financial Protection Bureau. The CFPB, by its nature, he suggests, won't weigh one channel against the next, or one consumer's interaction with one product versus that same consumer's interaction with another. No matter how many products a bank offers, under whatever terms or configurations or add-ons, it all comes back to understanding a customer's interaction with those products and relationship with the bank -- across all channels.
"What we're seeing is some organizations come in and say, 'Hey, we have one customer -- if we continue to run these channels individually, we're impacting the cutomer experience,' " Caldwell explains. "You can't gain enterprise efficiencies by not managing all channels together."
According to LECG's Ruckh, the first step in aligning data, streamlining processes and having a single version of the truth to report to government regulators is as simple as reflecting on the old adage, "The customer comes first." "Somewhere it has to come back to client service," he says.
"Once you can centralize it on a client, then the Consumer Financial Protection Bureau is going to get all their information and you know everything about the client. Therefore, you match up," Ruckh adds. "To me, it all swings back together."
All of this has upped the urgency among banks to get data management right. From a bank perspective, data rationalizaton and analytics can help build a clear picture of the customer and how the customer interacts with the bank's various products. Reporting to the CFPB simply adds an incentive to get it right.
"The drivers of the past continue to exist today," Capco's Small says. "[The CFPB] is just an incremental driver that's going to force data rationalization to become more of a front runner in terms of IT spend. It's a significant push, data rationalization -- some can argue that it's been listed as one of the top five or top 10 priorities of large financial institutions for the last 10 years."
The banks that ultimately are most successful will be those with a clear vision from leadership that dictates the reporting requirements of the CFPB are met with an organized strategy and data that points to a single version of the truth. "While the analytics may be rudimentary or basic to the silo or the specific line of business, it's much more difficult for the organization as an enterprise to produce, understand and mobilize itself around that information," Caldwell explains. "Clearly I think the business is going to drive the conversation because they are going to be the ones that organize what it is that needs to be done."
Depending on the size of the organization, that could translate to several different technology approaches, he adds. But at every level the threat of new regulation also could mean an opportunity for IT to sunset legacy systems and modernize the ways a bank does business from a technology perspective. "This actually gives them an opportunity to get it right," Caldwell says.