Perhaps no aspect of the business sector is as data heavy as finance, which overflows with metrics, ratios and numbers. By itself, this data is useless. It only becomes valuable when a financial professional analyzes the data, draws a conclusion and presents the findings to others.
To effectively draw conclusions from raw data, many finance professionals, such as graduates of Carleton University’s online Master of Business Administration (MBA) concentration in Financial Management program, rely on data visualization.
In fact, according to a 2018 survey of 900 financial professionals, including 450 CFOs, Accenture found that 81% of respondents identified data storytelling as an essential skill for finance professionals.
Importance of Data Visualization in Finance
Data visualization is the process of communicating numbers or raw information by transforming them into visual objects. This process is vital in data-heavy industries like finance because, according to Toucan, people process images 60,000 times faster than text. With this in mind, a data visual can help finance professionals quickly communicate different insights to those who aren’t as analytically inclined.
In general, the most common example of data visualization is a graph, chart, plot, infographic, heat map, bubble cloud, scatter plot, Mekko chart, animation or something similar.
One typical form of data visualization is a stock chart. You could present a stock’s movements by showing the increase/decrease in the price over time, but this would result in a complicated table of raw figures. Instead, by putting the data into a chart, you can quickly see whether the stock is trending upward or downward.
Here are a few more ways that financial professionals can leverage data visualization:
- Risk reporting and analytics
- Client reporting
- Managing liquidity
- Customer analysis
- Detection of anomalies and patterns
Putting this data into a visual form allows financial professionals to digest it much more quickly, which is critical in many financial professions.
Common Data Visualization Strategies
Finance pros can use various methods to transform raw data into a compelling visual. However, ThoughtSpot highlights three specific strategies every finance professional should know:
- Pivot table: This strategy aggregates large quantities of data into a single view, organizing the data by different attributes. This allows finance teams to see the full picture of your organization in one singular view.
- Stacked bar: This strategy takes the bar chart one step further by stacking multiple sets of data on each other so you can visualize different attributes in one view.
- Heat map: This strategy lets you see how different data points are dispersed over a geographic region. This strategy is especially useful for companies with operations in other locations.
Knowing which visualization method is best for the data is another skill required for financial professionals. For some data sets, a bar graph might be best. But, for others, a heat map will be most effective.
With all that said, any computer program can take a raw set of data and turn it into a chart. However, even in a visual form, this data is largely useless. It only becomes valuable when a financial professional can interpret, understand and communicate data conclusions to others.
Weaving Compelling Narratives From Data
Due to the overwhelming amount of data available in today’s world, companies are increasingly interested in hiring professionals who can interpret this data and discover the story behind it. This is particularly important in a finance sector that relies on stats, numbers and data.
If a career path in finance is appealing to you, you should consider pursuing an advanced degree, such as an MBA. Earning an advanced degree will help make you a more attractive candidate to prospective employers. Additionally, an MBA communicates to employers that you have already achieved a certain level of knowledge. This can jumpstart your career by making you eligible for higher-level positions upon graduation.
Some programs, such as Carleton University’s online MBA in Financial Management program, even concentrate on data analytics related to financial management. For example, Carleton University offers courses like Data Visualization for Analytics. In this course, students learn the principles, techniques and applications of data visualization to empower their decision-making. This course includes learning which types of visuals are most effective for storytelling. Students can complete this fully online program in as few as 12 months.
Learn more about Carleton University’s online MBA concentration in Financial Management program.