What is data literacy and why is it important?

Why is data literacy important for the financial services industry?

Data literacy is important for the financial services industry in general, for those who work in it and also for customers.

We need to ask the question ‘what would a data literate customer be empowered to do?’ For one, they would be able to get answers to important questions that would help them live better lives. Questions such as what percentage of their take-home income goes towards their mortgage? What happens if they increase their pension contributions? Will they feel the pinch day-to-day? And how can they better prepare their children to understand their spending habits?

We have the data to answer these and many more questions at our fingertips. And as we continually strive to update and improve our digital offering, we can see how an increased level of data literacy will be of benefit for ourselves and for those we seek to serve. 

The same is true for our colleagues too. As we transition from legacy systems on to cloud platforms, being able to access, manipulate and draw insight from data and use that to ask the right questions and make better, data-led decisions is key in transforming Lloyds Banking Group as we accelerate our digital journey. 

But there is still currently a knowledge gap. In fact, as early as 2021 research from the UK Government found that around half of workers had received no data training in the previous two years.¹ Closing this gap in capabilities is crucial. We must ensure we optimise the tools we need to guarantee our colleagues are data literate, empowered to be data-led, data driven, data confident and data ready. 

How are we adopting a data culture at Lloyds Banking Group?

Quite simply financial services is, and always has been, data-led. We’ve always used the data at our disposal to make better business decisions, to ensure robust and correct reporting for regulatory purposes and to provide the right level of financial support to our customers. 

As both data and digital systems have become more prevalent, so too has their usage across the business from branch to boardroom. However, the proliferation of data, its ubiquity and its regularity create problems too, such as the ‘paradox of choice’ that can come from having too much data, or data that does not lend itself well to speedy decision making. 

Increasing rates of data literacy, then, will allow for more people to be more comfortable in using data to make better decisions across the business and incorporate digital first and agile focused ways of working that have not always been prevalent in financial services.

What does the data literacy team at Lloyds Banking Group do?

For us, data literacy is so important that we have our own dedicated data team. Duties include collaborating with each business unit within the Group and crafting tailored data literacy programs that not only meet our internal goals, but also enhance our service for customers as well. 

More broadly, though, the data team run engagement sessions where it’s possible to identify pivotal opportunities to elevate business performance and customer satisfaction by harnessing the power of improved data literacy. 

In addition, they mobilise sophisticated measurement tools, tracking our advancements in data literacy, highlighting our commitment to continuous improvement for the benefit of our teams and our customers. In addition, they provide curated, interactive tools designed to enrich the data literacy journey and foster an environment of innovation that directly benefits our customer interactions and solutions. 

For example, some of the gamified learning experiences that are available through the Tech and Data Academy have been designed to rapidly uplift our colleagues’ data maturity and enable them to start leveraging data-driven decision making for the benefit of their teams quickly. 

Lastly, the team facilitate access to our in-house experts for training – ensuring that our team is not just informed but empowered, enhancing our ability to meet and exceed customer expectations through informed decision-making. 

Looking ahead

At the time of writing, we have over five billion logins and 20 million digitally active users, as well as two million daily transfers. Data is, in short, a driving force in our ambition to helping Britain prosper and we’ll continue to put it at the heart of everything we do.

In 2024, we’re undertaking our biggest data recruitment drive to welcome another 100 data graduates and 10 industrial placements. We’ve had thousands of applications across three data programmes, which demonstrates a phenomenal appetite to join Lloyds Banking Group, and will ultimately help us lead the charge in the data space for financial services.