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Data analysis: finance professionals must ask the right questions

Author: ICAEW Insights

Published: 14 May 2021

Data offers huge business opportunities and boards, funders and creditors increasingly expect data analysis to underpin decisions, but financial controllers must grasp the challenges surrounding data integrity, trust in data and ethics to capitalise on its potential, an expert is warning.

Financial Controllers (FCs) don’t need to be data analysts but they do need to hire the right technical people, know the right questions to ask them and understand how to interrogate the data, says Franki Hackett, ICAEW member and Head of Audit and Ethics at Engine B, a purpose-led AI company delivering data and analytics for professional services.

Hackett - a data scientist, auditor and visiting fellow at King's College London - warns that understanding your business needs must be the starting point for choosing data systems, and yet there’s often a temptation to buy something because it’s shiny rather than thinking about what you want to get out of it. 

“Thinking about your strategic direction and what support will help you deliver that more effectively will help you choose between the different software options available. That might be developing something in-house, choosing something off the shelf or going for something that’s not entirely standard but will work well for your industry,” Hackett says.

Despite the temptation to “set it and forget it”, constant evaluation of both your systems and your approach is essential, Hackett warns, to ensure the data you’re using is accurate and secure, and that you’re interrogating it in a meaningful way that not only adds value to your business but is also ethical. 

Data ethics and human impacts

The ethics of data touches on issues of data confidentiality and security – what you choose to delete or store, and how you protect it. “As you start implementing systems that monitor staff working time and tracking what they do while they’re at work [an increasingly common trend during COVID], there are new types of data that you’re beginning to store. FCs need to be thinking about how they keep it confidential and the potential impact on your employees and your customers of collecting that data.” 

And as we move towards automation of decision making on the back of your data, how can you make sure you have the appropriate governance in place to ensure there’s no bias or unintended human impacts, Hackett asks. “If you’re automating your decision making or making decisions based purely on what the numbers tell you, you’re abdicating your responsibility as a professional and you’re not bringing your judgement to bear. It’s important to think about what the numbers aren’t telling you.” 

“If you’re a retail business offering special offers to customers based on the information you have about them, is the algorithm accidentally picking up characteristics like gender or race. If so, you could be inadvertently discriminating, so you need to monitor those things,” Hackett explains.

Hackett admits that for those not familiar with working with data, it can feel daunting to understand how you develop these kinds of skills. “ICAEW’s data analytics community and the range of resources ICAEW provides can help people gain that skillset and feel confident,” Hackett says. 

What’s also true is that developing data analytics skills can also be a career-enhancing move, Hackett believes, and stand FCs in good stead to step up to a COO or CEO role. “You can quite quickly become sufficiently expert in these technologies to become a real leader and make that transition to the next stage of your career and to demonstrate the additional package of value you can bring.”