The last 15 years has seen an explosion in the amount of data that is being captured and stored. Whilst this applies to all sectors of the economy, it is particularly true for the gambling industry.
Deposits and withdrawals (or cash in and out) is just the very tip of the iceberg when it comes to the amount of data that is readily available. There is a wealth of data recorded on player interaction with the user interface; whether that is a menu on a terminal or a website. Additional, more granular data on game interaction provides a further layer of detail on player interaction and decision-making as they progress with their session.
Add to this marketing and promotions activity, responsible gambling messaging and other regulatory requirements and there is a lot of data being captured.
The Gambling Commission have always taken a keen interest in data and have, over time, increased both the amount of data as well as the level of granularity of information they require. Tim Miller’s recent keynote speech at the Know Now 2021 conference contains some clear messages for the gambling industry when it comes to data. As Executive Director of the Gambling Commission it is worth considering exactly what he said.
“One of the areas where the NAO rightly challenged us was on the way we use data as a regulatory tool. Undoubtedly, we need to do much more in this space. We are clear that, in order to be evidence based in our approach, we will increasingly need access to robust, comprehensive data. Further investment will be essential for the Commission to both realise the potential and manage the risks that come from regulating an industry where technology is changing all the time. However, all the investment in the world will not deliver a more effective Gambling Commission if the data we receive from operators is lacking.”
To underline the point and send a clear message to the industry he went on to say;
“Industry and others should rightly hold our feet to the fire to ensure that our work is grounded in evidence. But the quality and timeliness of data from industry is the single biggest limiting factor. In next year’s business plan, we will set out a programme of target compliance and, if necessary, enforcement action around the quality and timeliness of the regulatory returns we receive. So, I would strongly encourage operators to use the remainder of this business year to ensure your data quality processes are robust and fit for purpose.”
The message is quite clear. The Gambling Commission are going to be asking for a lot more data and they expect robust, high-quality data delivered in a timely manner.
Whilst the messaging from the Regulator alone should be sufficient for every business to have a clearly defined data strategy, there is also the significant risk of sub-optimal decision making. The exponential growth in data does not automatically result in better decision making. Indeed, quite the opposite is often the case with some businesses literally drowning in data and not making timely, accurate decisions.
According to a recent report by IDG(1) 67% of IT leaders defined their data environment as ‘chaotic’. Perhaps of greater concern is the fact that 70% of survey respondents agreed that data is underutilised in their business.
Many businesses will publicly state that they are a “data-driven business” and that “evidence-based decision making” is a core part of their corporate DNA. There is good reason for this.
The benefits of being a data-driven business have been well-documented. Some recent examples include;
· Companies that are data-driven are 23 times more likely to acquire customers, six times likelier to retain customers, and 19 times more likely to be profitable and successful (source: McKinsey Global Institute)
· Data-driven organisations are 178% more likely to perform (source: IBM)
· Companies that rely on data achieve a better financial performance (source: Harvard Business Review “The Evolution of Decision Making: How Leading Organizations Are Adopting a Data-Driven Culture”
The IDG report also highlights the fact that many businesses are not optimising the return on their investment in data and analytics with just 31% of organisations adept at extracting valuable insights from data and creating trusted business assets.
The objective in creating a data-driven business is therefore eluding most organisations. When the benefits of being a data-driven business are clear and well-documented, why are over two thirds of businesses failing to capitalise on this?
There are many reasons why businesses never fully achieve their objective of becoming data-driven. Lack of investment and absence of executive level sponsorship are two of the more common factors.
To be data-driven, a data strategy is critical in ensuring that data is efficiently and effectively utilised to create and deliver value for the business. The data strategy is not just an IT plan looking at technology and data.
To be effective, the business data strategy needs to be owned by the Executive Team and encompass the four key areas of data, technology, people and process. The strategy needs to clearly articulate how data is converted into value along with a plan setting out how this will be achieved and embedded in the business, with associated costs and timescales.
The business data strategy is the roadmap that sets out the journey from where the business is today, to where it needs to be. Becoming data-driven takes time, focus, commitment, and persistence. Too many organisations minimize the effort or fail to correctly estimate the time which these kinds of business transformations require.
Do you still believe that you can sustain and develop your business without a coherent business data strategy? If so, I would seriously encourage you to think again.
(1) – International Data Group; “9 trends shaping the future of data analytics