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Data warehousing: Considerations, drawbacks, and data platform alternatives

Kate Randazzo
June 23, 2023
Read Time: 0 min

A unified data platform helps banks organize without the headaches

Abrigo Connect offers an alternative to data warehousing that lets financial institutions more easily put their data to use.

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Takeaway 1

Banks and credit unions often face challenges implementing data warehouses and are not pleased with the result.

Takeaway 2

Some form of data organization is a must, so financial institutions may consider alternatives like a data platform.

Takeaway 3

A unified data platform like Abrigo Connect can take away the stress of sorting and reconciling data for financial institutions.

Organizing your data

Is data warehousing worth the undertaking?

For any financial institution, managing, processing, and analyzing data requires a dependable system to help you make sense of the information you’re gathering and use it to optimize operations. Finding the time and resources to sort through data can be a challenge depending on the size of your institution. Data warehousing may seem like the solution to your institution’s data problem, but it comes with its own challenges.

Financial data warehouses are centralized repositories of integrated financial data from different operational, internal, and external sources. However, despite the substantial time and financial investments dedicated to them, studies have shown that approximately 80% of data warehouse projects fall short of their intended goals.

Implementing a self-managed data warehouse is a massive undertaking that requires careful planning and execution. To gather and make sense of all the data it needs, an institution must put it into a predetermined format, and conflicting data must be reconciled (e.g., a postal code coming from one source with five digits and another with nine digits). 

 

“It takes effort to get data warehousing 100% right,” said Nathan Myers, Vice President of Integration and Client Care at Abrigo. “And unfortunately, in some cases, data that is not 100% right is 0% useful.”

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Consider this

Data warehousing challenges and impediments

Here are some other key points to consider:

  • Time and cost: Implementing a data warehouse can be time-consuming and expensive due to the collection, cleaning, and integration of data from diverse sources.
  • Manual data processing: Relying on manual data processing increases the risk of incorrect data entry, highlighting the need for automated and accurate data handling processes.
  • Complexity: Data warehouse implementation requires data modeling and database management expertise, making it challenging for organizations to implement and maintain.
  • Data silos: Data warehouses may create separate data infrastructures, potentially leading to data silos and difficulties ensuring data consistency and currency.
  • Performance impact: Data warehouses require significant processing power and storage, which can impact the performance of operational systems.
  • Data governance: Robust data governance practices are necessary to manage and use data consistently and compliantly, requiring additional investment in policies and personnel.
  • Evolving requirements and technology: Sources and source data will evolve, necessitating the adaptability of the data warehouse. Handling continual technological changes and aligning them with warehouse requirements is an ongoing challenge.

Abrigo alternative

A data platform alternative to traditional warehousing

For many financial institutions, the challenges of self-managed data warehousing outweigh the potential benefits. Without some form of data organization, turning the mountains of records from core systems, spreadsheets, loan files, and other data sources into meaningful, usable information can feel impossible, complex, and expensive. So, if data warehousing projects may be doomed to underperform – what other options exist? When faced with such a decision, most institutions either go back to old faithful (core extracts & excel pivot tables) or choose an expensive third-party data warehousing partner that still requires them to sift through and reconcile data to transfer over.

One alternative to self-managed and third-party data warehousing is using Abrigo Connect, a banking intelligence solution for Abrigo platform users that brings your data together in one platform without expensive data scientists or complex technical infrastructure. Abrigo leverages its decades of experience working with financial institution data and intimate knowledge of the internal Abrigo data model to curate data into a meaningful and intuitive format for users to explore and answer the questions they face every day.

Abrigo Connect uses AI, natural language search, and analytics to transform raw data into the insights bankers need to better assess performance, unlock growth opportunities, increase employee efficiency, and anticipate future risks.

Advantages

Benefits of a unified data platform

Unified data platforms like Abrigo Connect can provide several distinct advantages over self-managed data warehouses, such as:

  • Built-in data cleansing. Abrigo Connect uses information already flowing through the Abrigo platform to integrate data quickly and avoid lengthy, expensive data integration projects.
  • Controls. No matter the size of your staff, ensuring proper data access is critical, so a unified data platform should provide custom user permissions and controls. It should also make it easy to find information. Since Abrigo Connect is powered by AI and GPT 3.5, users can easily find the necessary information via a quick search with everyday terminology.
  • Abrigo Connect provides curated insights into your customer base and sources of risk, including in-depth analysis of alerts, cases, SARs, CTRs, and transaction volumes to streamline and enhance board reporting. It also helps accelerate growth with greater visibility into data to measure performance targets for loans and deposits, uncover hidden cross-sale opportunities, and analyze deposit trends.

A data platform like Connect offers financial institutions a user-friendly, affordable alternative to self-managing a data warehouse. “The benefit of a strong data platform is that it pulls data from a suite of analytical and operational software that actually uses the data every day,” Myers said.  “Since users actively and consistently use these tools, the underlying data will naturally be more reliable and accurate without any additional effort required for financial institutions."

Stay up to date on the CFPB 1071 data collection rule and other lending compliance topics.

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About the Author

Kate Randazzo

Content Marketing Manager
Kate Randazzo is a Content Marketing Manager at Abrigo, where she works with industry thought leaders to create digital content that helps financial institutions better serve their customers. Before joining Abrigo, Kate managed social media and produced articles for Campbell University’s quarterly magazine and other university content initiatives. She earned

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About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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