“In-house” means different things for FIs with different capabilities. It also suggests why partial outsourcing can be a half measure. Few FIs have a strong ability to extract, collate, and utilize the customer data in their systems. Reporting is often rudimentary and manual, and even when data management is automated, fragmented systems stand in the way of a holistic view of customers. Competitive hybrid and in-house approaches often demand new technologies.

A good exercise for an FI’s management team would be to step back from day-to-day reporting and get a clear idea of what needs to happen for the FI’s data to support meaningful insights into customers. They should then ask what the FI should do, either on its own or with a vendor, to facilitate the data’s transformation into insights.