Journal Detail

Journal 11 – Data

September 2004

The word ‘data’ is used quite a lot these days, surpassing word peers such as ‘information’ and ‘knowledge’. At the same time, questions are also being raised about the data used to defend changes in monetary policy. This issue aims to provide answers on the subject of data.

The word ‘data’ is being used quite a lot these days. From the reliability of intelligence data gathered prior to the war in Iraq to the data used in determining possible rises in U.S. interest rates, data has become a very popular term. It has, if you will, made a comeback and is surpassing word peers such as ‘information’ and ‘knowledge’.

In the same way that people are challenging the data employed to justify the war, questions are being raised about the data used to defend changes in monetary policy. For example, can experts cope effectively with the hosepipe of information pointed at them, especially when most of this data is backward-looking? Can central banks then use this data to truly influence the economy? Experience extrapolated from the intelligence world has shown, at least with the tragic events in NYC and Madrid, how difficult this is.

Most of us have been interested in these questions for years but have yet to hear convincing answers. This issue of the journal aims to provide them, as we present the views of some of the world’s most respected economists, including the distinguished Nobel Laureate, Paul Samuelson, on the subject of data.

Global macro-economic and socio-political environments are very important to business, as they impact risks and returns. But financial executives are even more interested in how they can improve the management of this raw material — data — within their own organizations. How data is captured, disseminated, shared, and analyzed across the whole enterprise can have significant implications on efficiency and profitability. That is why we have dedicated most of the current issue to this topic.

In section two, we focus on how financial institutions go about collecting data from many internal and external sources to improve the way they deal with clients, regulators, and competitors. The accumulated data is where all this information is concealed. What are then needed are tools to extract that information.

Section three focuses on how the true business value of data can be captured. It describes the quantitative and qualitative tools available to management to make the best possible use of data. This is especially useful because financial institutions do not seem to be as well placed as other industries to take advantage of these tools. Consequently, we feature experts who understand not only our industry but others as well. Here, they give guidance on how to transform data into information that can help us improve the returns from current clients, attract and retain new customers, and ensure that we achieve these objectives while meeting the ever-increasing number of regulations imposed on our industry.