A new research report from Cornerstone Advisors, a leading provider of business and technology consulting services for banks, credit unions, and fintech firms, reveals that community-based financial institutions (FIs) are making progress in leveraging data but still have significant room to grow.

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. 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 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," said Ron Shevlin, chief research officer at Cornerstone Advisors and author of the report. "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."