According to Gartner, poor data quality costs businesses over $9 million each year. Apart from the negative financial effects, several aspects of data quality can negatively impact business reputation and decision-making. This confirms the essence of data quality for businesses, especially for money lenders offering several financial services, including private commercial loans. Business owners across multiple industries depend on timely data to assess different situations and make better decisions. On that note, this article delves deeper into what data quality is and the various data quality benefits.
What is data quality for money lenders?
The finance industry is a large sector, making up 20 to 25 percent of the global economy. The industry reportedly grew by $12 trillion between 2020 and 2021, serving billions of customers. In today’s digital economy, money lenders store large data volumes from disparate sources to provide services that suit their customers’ preferences. Often, customers record various changes in their daily livelihoods and, by extension, their data sets.
Keeping up with these numerous changes can cause several challenges for data consistency and data governance efforts. That’s where the importance of data quality comes into play. Data quality measures how connected and fit a data set is to serve a business’s specific purpose. Data managers deploy indicators to measure crucial data quality characteristics, including completeness, accuracy, consistency, and timeliness. The uniqueness in the opportunities and challenges business leaders face can cause data quality metrics to vary. Different thresholds and business rules can also be a factor.
Why is data quality important in finance?
Money lenders can enjoy numerous data quality benefits, including:
More Competitive Edge: Modern customers and aspiring homeowners have several ways to access financial services. For instance, a quick online query for “hard money lenders Idaho” can bring up several competing brands in Idaho that offer loans for real estate investments. That means the battle is for the strongest Google profile. Therefore, you need the best insights to guide your money-lending firm’s visibility on the web. Data is one of the valuable resources organizations have in increasing their competitiveness over other businesses in the finance industry. Scaling your money-lending services demands access to good data, and higher-quality data can afford you better insights in unearthing growth opportunities before your rivals do.
Improved Customer Service: Customer data can lose integrity over time when customers change their phone numbers and locations or use new applications. These new data sources may not be recorded and reconciled on time. Furthermore, these data changes can limit marketing campaigns’ effectiveness and directly impact your customer relationship management efforts. The effects can also spiral into misjudgments and a lack of trust from customers. Therefore, it pays to prioritize the quality of your data so customers can access the best of experiences when patronizing your money-lending services.
Better Decision-Making: Leveraging data from various sources for your business operations and decision-making demands clean data. What’s more, any duplicate recorded during data analysis can inflate your operational budget and lead to waste. Poor insights can also affect your strategic planning and cause you to focus on the wrong market segments for commercial loans. Access to good data and effective analytics is the only way to better results.
How can money lenders improve data quality?
Often, financial service providers will deploy a data governance team in charge of all its data quality programs. However, fighting data quality issues from one angle while other business units continue with ineffective business processes can churn minimal results. Ensure all the different departments of your money-lending firm are subscribed to an organizationally approved data culture that matches your quality levels.
All in all, investing in data quality efforts is crucial in sustaining modern money-lending firms in the current financial market. These reasons can help you understand the importance of data quality and guide your decision to invest in a data quality strategy.