Let’s make Finland the leading country for refining data
Data is often called the new oil or electricity. Data is a significant raw material for businesses, but it is also a lot more than that. It is time to get rid of this simplification and talk about data in a new way.
The global growth in the volume of data is often compared to digital evolution and the progress of the fourth industrial revolution. In my company, OP Financial Group, for example, the volume of data contained by analytical databases, let alone raw data, has dramatically increased year by year. Our significant data capital makes it possible to provide unique benefits to our clients, stakeholders and the entire society.
Goodbye, volume of data…
Talking about the volume of data is common and understandable, but talking about just petabytes is one-sided and even misleading. The volume of data does not have a direct impact on the competitiveness of business, the quality of innovation or decisions, or the benefit experienced by the client.
Therefore, instead, or at least alongside, quality, we should focus on talking about the value of data. Measuring the intrinsic value of data or the value it generates is the big data-management question of our time. There are several justified perspectives on it but, for the time being, very little understanding or commonly accepted indicators.
…welcome, value of data
However, we have to stand up to the challenge. Data is valuable when it provides benefit. That is, when it is used – or can be used – in a way that creates new value. Asking about the benefit created from a specific set of data to business, client or society, for example, is the right question.
When a chatbot helps an online banking customer, when well-trained artificial intelligence identifies risks in the monetary system, or when a digital coach provides personal advice through a mobile channel to help a customer keep their finances under control, new value is created. Value is also created when high-quality code reduces the power consumption of data centres or consumes less bandwidth or storage space. When positive changes are reflected onto people, society or the environment, the value of data increases further.
The better a company generates value with data, the more valuable the data and the company itself are. Metaphorically, roundwood is far more valuable as a raw material for biocomposites than pulp. Innovation and refining expertise have an impact on the value of data.
Quality is also decisive when it comes to data
Value creation requires enough data, but the quality of the data raw material is more important than its quantity – whether “quality” here refers to freshness, accuracy, usability or availability. High-quality data is, of course, also valuable per se, and high quality is also the norm when selling data.
Because the volume of data is rising dramatically every second, the volume and use of data must be actively managed. From the point of view of the quality of data, value creation and also risk management, managing the life cycle of data is a significant area. The more data is created and stored, the more resources its quality and risk management require, let alone its operation.
All data must have a life cycle of its own, from birth to safe destruction or reuse. Therefore, we need to turn our eyes to the fragile balance between the amount of data and the value created with it.
Data will create well-being
In recent years, OP Financial Group has been building a more comprehensive model of data value creation that combines data management and use. With the data balance sheet of OP Financial Group, we have aimed to explain our approach to sustainably using our data capital in a value-generating way that matches regulation and customer expectations. We annually publish the results of our work to our stakeholders in the form of a separate data balance sheet.
Future services must create entities that improve people’s quality of life. Comprehensive customer understanding, or data, is the key to the life of the customer. When everything becomes mutually networked, it is time to ask whether data could be of even more benefit when shared or refined together with a partner. The opportunities are great, but they require clear rules from all parties, especially in the highly regulated financial sector.
The success of industrial Finland was based on industry’s high-quality raw materials, expertise in refining them and the narrative of shared well-being. The success story of Finland in the data age is based on the same things. Data and its advanced use will help Finnish businesses to create value for their customers and operate safely and successfully in the rapidly changing and complicated global business environment.
Now, it is our turn to make Finland the world’s leading country for refining data.
Read more about the use of data by Finland’s largest financial group from OP Financial Group’s Data Balance Sheet.
Sitra’s guest blogs give a voice to the players of the future in different fields. They do not necessarily directly link to Sitra’s work or agenda, but are the authors’ thoughts on current issues that relate to the themes Sitra is passionate about. Sameli Mäenpää is Chief Data Officer at OP Financial Group. He has 15 years of banking experience and has been involved in establishing several start-ups.