Success in Financial Services With Dashboards: 4 Ways to Get Started

There’s a seachange happening in financial services. Digitalization, which has changed the game in many industries, is now transforming finance. Incumbent institutions are coming up against fintech startups while tech giants are dipping a toe into financial services. Younger clientele both expect and demand more digital services. On top of all that, COVID-10 is creating a new normal that relies on technology for frequently updated – and easily accessible – data.

For CFOs, this is a time of transition and change. While tasks such as producing financial reports are still necessary and expected, the ability to digest and act on large amounts of data has become increasingly important. Firms can dutifully produce numbers, but that doesn’t mean they’re using them to their full advantage. That’s where financial dashboards come in. With dashboards, finance leaders can do more to support strategic internal conversations by pulling key pieces of data or insights gleaned from analyzing data in real time.

Analytics: the way of the future, now

Leaders in finance have traditionally relied on intuition, namely because of a lack of empirical data. That’s changing now as digitization has enabled an explosion of information.

Data is everywhere from computers to wearables such as watches to cars, health devices, even refrigerators. This hyper-connectivity yields more opportunities for financial institutions. Customers today share more personal information with banks, insurers, and asset managers in the hopes of getting the best deal.

In this new age of digitalization and personalization, one-size-fits-all offerings will fall by the wayside. Leaders are increasingly using data and analytics to inform decisions and offer highly customized products/services on a massive scale.

For life insurers, wearable devices, like a smartwatch, could eventually make the underwriting process more collaborative. Insurers could potentially use these real-time insights to offer discounts or simplify the contract process by eliminating the need for lengthy medical checks. In asset management, hyper-connectivity will help pave the way for greater product customization. In the near future, customer intelligence may be the most important predictor of revenue growth and profitability.

Adapting with the right tools 

Given the trend toward analytics and automation, having the tools to analyze and glean insights from that information is more important than ever. Financial dashboards – which showcase real-time data – can help organizations measure the benefits of digitalization by giving CFOs a better view into the overall health of a firm.

Instead of relying on multiple spreadsheets (sometimes with 25+ tabs!) or spending hours gathering finance and operational data from multiple sources, financial dashboards give you one source of truth. This helps finance leaders to turn data into insight in real time.

Dashboards give CFOs and finance managers easy access to all the relevant information so they can make data-based decisions rather than relying on gut instinct.  Everything is in one place making it easier to flag trends, spot reconciliation discrepancies and drill down for more detail. Capital market firms can make faster, smarter trade decisions based on sophisticated analyses of past market performance data. Companies can create reports that analyze business performance in real-time with detailed financial and metric data. Dashboards also help finance professionals tell a compelling story using graphs and visuals. 

With a financial dashboard like the one above, CFOs can refer to visual graphics to digest financial health in seconds. Clicking on active data links (the text in blue), users can drill down to see more details. This allows you to proactively uncover opportunities and identify potential issues so you can take action faster.

There are also long-term benefits to designing a dashboard. The process of working with various organizational leaders to design a concise reporting tool – which can be created in minutes using a modern cloud financial management solution – forces key stakeholders to weigh priorities and come to a shared understanding of long-term goals. Clearly defining these goals helps CFOs make time-sensitive decisions about investments and cost allocations. 

New tools such as dashboards are an investment of both time and money, but companies that reduce costs selectively by focusing on operational efficiency have the highest probability of success after a recession. Efficiency, whether through technological tools or other means, enable financial firms to improve the customer experience while reducing internal transactional processes. Research from the McKinsey Global Institute concludes that 40 percent of finance activities (for instance, cash disbursement, revenue management, and general accounting and operations) can be fully automated, and another 17 percent can be mostly automated. By reducing the time spent on repetitive, manual administrative tasks, finance teams can focus on more value-added services that can have a positive impact across the organization. To stay ahead in uncertain times, investing in efficiency gives financial firms an edge.

Four ways to get started with financial dashboards:  

1. Create a diverse working group to identify what matters to your organization. The dashboard team could be made up of leaders from finance, sales, and operations. Identify who is instrumental to establishing goals in your organization.
2. Measure performance against the desired target. Using a graph that displays targets alongside actual performance for investment results, revenues, and expenses can tell an interesting story about different parts of your organization. A good place to start is the current fiscal year’s operating budget. As you forecast and adjust your budget, update your dashboard’s targets accordingly.
3. Pilot the dashboard for a set amount of time, then reevaluate. For each graph, identify key questions that make it easy to determine its utility. For example: do year-to-date trends in budget-versus-actual performance align with timing expectations?
4. Stay away from over-engineering and build a simple dashboard that is easy to maintain. Your dashboard should be a financial management tool that is painless to update monthly or quarterly.  

For more information about dashboards, check out this webinar: Financial Dashboards and Metrics that Matter for Financial Services Firms.