Obtaining valuable insights about your business and financial health using financial data can help you increase profitability, improve cash flow management, and more. However, there are many challenges that must be addressed before you can achieve full benefits from the data.
First, your organization must be prepared to manage large amounts of data. This includes ensuring data consistency and documentation. Second, you must have a strong infrastructure in place to support your system. This includes a high-assurance digital ID that provides strong customer authentication and privacy protections. Finally, you need to have broad population coverage for your system.
There are several benefits of using financial data, including improving customer service, reducing costs, and boosting economic efficiency. However, poor data quality can cause major problems. A lack of skills in financial data analytics can limit its adoption.
A key challenge in achieving full benefits from open financial data is data quality. Poor quality can cause inconsistent and inaccurate data. For example, a company’s total debt may not be very insightful if its total equity is low. In addition, financial data quality is often out of date.
Financial data is critical for businesses. It is used in every aspect of the consumer journey, from the first touchpoint to the final purchase. Financial data is also used by investors in deciding whether or not to invest in a business. It is often audited by accountants and government agencies.
Open financial data can also help individuals get access to formal credit. However, individual financial services providers have the option to restrict access to data outside of a subset.