SCOTTSDALE, Ariz.– Community-based financial institutions (FIs) are making progress in leveraging data but still have significant room to grow, according to a new research report from Cornerstone Advisors that also identifies the “hallmarks of high performers.”
The report, “Improving Your Financial Institution’s Data Execution Quality (EQ),” commissioned by KlariVis, introduces a framework for measuring how effectively financial institutions use data across five key functional areas, according to Cornerstone Advisors, which said the results reveal that the average Data EQ score among more than 120 surveyed banks and credit unions was just 241 out of 500, or “little more than halfway” to optimal data utilization.
The Link Between Data EQ and AI Readiness
Cornerstone Advisors and Klavaris said the study highlights a strong connection between Data EQ and successful artificial intelligence adoption. While 35% of community FIs have already deployed chatbots and 25% are experimenting with generative AI, the report warns that AI initiatives will fail without a solid Data EQ foundation.
“Community banks and credit unions stand to benefit significantly from AI — but only when their data infrastructure is up to the task,” Ron Shevlin, chief research officer at Cornerstone Advisors and author of the report, said in a statement. “The problem is that many financial institutions treat qualitative data like that weird uncle at Thanksgiving: there, but nobody knows what to do with it. Without a strong data strategy, even the best AI tools will underperform or backfire.”
Key Findings
According to the organization, key findings of the report include:
- Credit analysis ranked the highest from a data utilization perspective, though with an average score of 51 out of 100, “there’s a lot of room for improvement.”
- Sales and marketing showed the weakest results. Two-thirds of institutions scored below 50, reflecting limited personalization, segmentation, and campaign analytics capabilities.
- Credit unions outperformed banks significantly in every functional area, scoring an average of 271 vs. 211, suggesting stronger data-driven cultures within the credit union sector.
- Larger financial institutions generally achieved higher Data EQ scores. However, those with $500 million to $1 billion in assets scored lower than smaller peers, reflecting growing organizational complexity without equivalent data process maturity, Cornerstone Advisors said.
Hallmarks of High Performers
The report also identifies the hallmarks of Data EQ high performers — the top 26% of respondents — which stand out for their data-driven cultures and governance practices.
According to Cornerstone Advisors:
- 72% view information as a strategic asset.
- 56% say data drives strategic decisions.
- 47% foster a culture of data use.
- 41% regularly review data strategy.
The report can be found here.
