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Financial Services Industry: Avoid Data Migration Nightmares
A poor data migration process can have significant repercussions for businesses in the financial services industry. Here’s everything you need to know.
At its core, data migration is a relatively straightforward process. Its goal is to move, or “migrate,” data from an old system to a new one. When performed well, businesses in the financial services industry are better situated to derive more value from robust cloud-based platforms and their data.
The thing is, enterprise data migrations can be quite complex and equally as risky if not executed right. Between lost data, increased costs, and poor customer experience, migration failures can threaten business continuity and push financial institutions past the point of no return.
Five Indirect Costs of Failed Data Migrations
Before your organization begins its own data migration, it is vital that you are aware of and understand everything that is at stake because the fallout can be devastating.
1. Unplanned Downtime and Lost Productivity
Transitioning from one platform to another is more challenging than flipping a switch. Before an organization can make its big move, it must carefully migrate its critical organizational data to the new network.
As legacy systems get decommissioned and data is moved from one system to another, unplanned downtime can cause operational disruptions detrimental to the business. However, temporarily “shutting off” certain systems or datasets is not an option in certain industries, such as financial services. If not done logistically and strategically, that downtime can add up to thousands in costs.
2. Potential Data Loss or Corruption
One of the most significant risks during data migrations is data loss or corruption. As a team prepares for the move, they may intentionally delete duplicate, damaged, or inaccurate files. But without built-in data quality checks, performing these data cleansing tasks at scale can permanently remove or overwrite valuable data.
3. Customer Service Disruptions
Customers are the lifeblood of the financial services industry. Financial institutions must provide reliable, secure services to their target audiences if they want to thrive within such a competitive sector.
Modern consumers have plenty of options when choosing a bank; if their current provider drops the ball, they can easily transition to another. Even a relatively short-lived disruption could cost a bank thousands of customers. What's worse? Attrition rates may be even more severe if that disruption lasts days or weeks.
4. Compliance and Regulatory Risks
Like many industries, data migrations within financial services can be particularly painful due to regulatory compliance challenges, legacy systems, and a lack of visibility into data issues.
In 2022, for example, the international banking system, TSB, was fined €49 million due to an IT meltdown it sustained in 2018, which disrupted online, telephone, and branch operations. Regulators found that the organization ignored apparent IT infrastructure issues, leading to prolonged customer distress.
5. Reputational Damage
Cultivating a positive brand image takes years, but all that hard work can be undone by merely a few days of data migration-related service disruptions. The worst part is that much of the reputational damage may be impossible to undo.
Customers place a lot of trust in financial institutions and expect those entities to honor that trust by providing reliable, secure service. When banks fall short of expectations, consumers are slow to forget all of the stress that their institution caused them.
Strategies for De-Risking Data Migration
Hundreds of entities in the financial service industry are making a substantial push to adopt new cloud technologies. By embracing the trend, your organization can position itself to compete and better serve its customers. That said, you still need to set the stage for a successful data migration before transitioning to cloud-based software.
Build Contingency Plans and Risk Mitigation Strategies
Prepare for the (seemingly) unavoidable by building contingency plans and risk mitigation strategies. These plans should provide your team with a response strategy that they can leverage to resolve migration issues.
For instance, one risk mitigation strategy may involve archiving legacy data that is not being migrated to your new system. Should your core data ever be lost or corrupted, your team can recover its vital information using the archives.
Prioritize Data Quality
When it comes to migrating data, data quality is often treated as a formality or even an afterthought when adopting cloud technologies. In actuality, starting off with already cleaned, validated data is critical to a successful data migration project. Prepare for your data migration by putting data cleansing and harmonization tasks at the forefront of your project.
For a data migration project with few errors and faster time-to-completion, start your data migration with high-quality, validated data. Data quality must be treated as a top priority. Make sure to devote adequate time and resources to your migration process, or you may incur substantial direct and indirect costs like fines and lost productivity.
Work with a Data Migration Specialist
There’s almost no end to the number of data management solutions on the market today. By 2030, the data migration strategic market is said to reach a value of $34.2 billion. All of its growth has translated to the development of countless data migration tools, and adopting such tools can certainly help you avoid the aforementioned migration woes.
In order to navigate the intricacies of your particular migration, look for data management platforms and software backed by decades of industry expertise. During a partnership with a European financial institution, Syniti helped reduce its human capital requirements during migration events by 90%. As a result, the organization was able to support its entities’ data migration initiatives with a minimal amount of human capital, thereby increasing its operational efficiency and reducing waste.
Connect with Syniti’s Data Migration Team
If you want to learn more about how Syniti has helped financial services reduce migration costs, download our free e-book, The Power of Proven Data Migration Solutions.