Data analytics 2022: KBC Group

How long has the data analytics function existed in the company? What is the size of the team? How do data issues and data management fit into the company's strategy? 

It started in 2015, and is now one of the largest teams in the European financial industry. Data-driven strategy is a key pillar at the KBC Group level, meaning that it should become essential in everything we do.

Data quality is also key, and since 2015, it has become a specific focus for all company management data reports and is monitored at Group level, being reported to the Group Executive Committee, and supervised by the European Central Bank (BSBS 239 regulation). 

On the commercial side, data quality is equally important, especially since the inception of Kate, KBC’s digital personal assistant.

What short- and medium-term objectives have been set for the data department by senior management? Can we have an idea of the budget implemented (in absolute figures or as a percentage of the bank's budget)?

With regards to the scope of company management (Finance, Risk and Treasury calculation and reporting), groupwide data management was introduced in 2015. The move towards one common platform for company management (Rainbow program), was introduced in 2018 and is still ongoing. The initial scope is continuously assessed against new scope (loan tapes, ESG). Group Data Quality Management is responsible for the installation of these common frameworks and solutions and now has 200+ FTE working on Rainbow.

Regarding the scope of commercial data management, it is our ambition to become a mature data-driven organization in the short term, supporting our commercial activities to further leverage the data opportunities within the organization. We have a transformation program with a half-yearly roadmap formation for implementation.

What are the biggest challenges you face in achieving your goals? (Financial, organizational, regulatory, IT, cultural, etc.)

For KBC we envision the following challenges:

• Cultural: Broadly adopting a data-driven mindset is challenging and takes time. Traditionally, most employees don’t feel very comfortable with anything related to data, they’d prefer to leave it to ‘the experts’.
• Organizational: Historically, data has been stored, managed and used in operational product entities (silos). To fully grasp the potential, data needs to be shared and connected on a company level, taking into account the trust of our customers and regulatory constraints.
• Technical: A low maturity of tools (e.g. deriving business lineage from technical lineage /  smart dashboarding) and their need for lots of qualitative metadata also unveils the poor metadata availability of our legacy of banking systems.

Within the area of company management, we see additionally the following main challenges:

• Continuously increasing scope (regulatory demand) and changing priorities;
• Small deviations between regulations (not only between countries but also between domains such as Finance and Risk);
• International cooperation and alignment of priorities;
• Investment in qualitative metadata of our operational product systems and processes.

Please give us one or two examples of concrete initiatives implemented to overcome these challenges.

Our current initiatives include sustained efforts on the ‘soft’ side of this transformation (e.g. data literacy for employees, development of extensive learning offer for all employees, and mandatory training for top 300 management staff) and regular internal communication from top management and data teams to inspire with success stories and show the added value of the data-driven approach.

We have also created central data lakes for regulatory reporting (Rainbow) as well as commercial initiatives, including associated responsibilities (e.g. data ownership) and governance aiming to use AI/ML to get new insights based on both structured and unstructured data.

Our regulatory reporting entails the following: 

• Close monitoring of the Rainbow program by Group EXCO (three times a year) and Board of Directors (twice a year);
• A monthly CDM Community which ensures challenges are continuously discussed, and monthly account meetings (both with data suppliers as well as consumers) which have been established alongside such communities and formal governance decision bodies;
• The SAFe way of working, which ensures that priorities, risks and challenges are discussed in detail before every quarterly implementation increment. Multiple SAFe ceremonies (huddles, demo meetings, trainings) have a high international character; all colleagues on expert and managerial level are in continuous contact;
• The rollout of new Key Performance Indicators and their measurements (e.g. on data quality), pushing towards investments in more and better quality of metadata.

What concrete projects has your department implemented that demonstrate your company's data management maturity? Can you specify, for example, projects that have implemented artificial intelligence? Or projects that have benefited from deployment in the cloud?

In general, the use of AI is for personalization of services to customers (e.g. Kate, lead management, KBC Deals), creating an instant and frictionless customer experience (e.g. claims declaration for car insurance, automated processing of payslips or invoices needed to get a mortgage), and improved risk management (e.g. detection of money laundering and other fraud).Also the recent launch of Discai as KBC’s own fintech to commercialize AI solutions.

How well do you think Financial Services benchmarks against other industries; any examples where you think Financial Services is ahead or behind?

Concerning the company management, compared to peers, we conclude KBC Group has very strong governance frameworks (165+ data owners across all entities), governance steering (group and local EXCO well informed on all initiatives), and active monitoring of applicability of data management principles through the yearly GKCs (group key controls as per Risk frameworks). 

While the Rainbow program still has a way to go, we also conclude our roadmap and target solution is more complete compared to other peers (both local and group reporting, and for all business domains).