Using Data Visualization to Tell Finance Stories

Most organizations collect a large amount of data from various business processes. Modern finance departments, who now track financial and non-financial metrics, usually analyze this data and provide information that facilitates decision-making.

Finance professionals, Certified Public Accountants (CPAs), accountants and Chief Financial Officers (CFOs), though experts in understanding complex data, struggle with presenting it well and are always in search of methods to communicate their analysis effectively. The large volume of data makes the analysis complex and incomprehensible to their client.

Even if some clients understand it within a spreadsheet, they may not perceive it as intended because of differences in experience and expertise.

Relevance

If you are a finance professional experiencing similar problems, you should consider data storytelling. Just as stories depict human experiences, data stories, which consist of data and analysis, describe business decisions and their consequences.

You may feel that carefully gathered facts and the insights derived from them should be sufficient to convince others to act. However, neuroscientists say that decisions are often based on emotion, not logic.

When you present information as data stories, you connect with the emotional side of the brain of your clients. This makes them far more memorable, persuasive, and engaging than when conveyed as facts and numbers.

Components

Data storytelling is the process of explaining data analyses in layman’s terms using a combination of data, visuals, and narrative.

The three elements have to work together in harmony for storytelling to be successful. They help capture the attention of your audience and help them understand the insights the data provides and why they are important. Thus, if you combine the right visuals, narrative and data, the story you tell will have great impact.

Choosing visuals is of great importance. In her book ‘Storytelling with data’, Cole Nussbaumer Knaflic says that there isn’t a single correct visual display for a specific story; different types of visuals could meet a given need. Your choice of visuals also depends on what you need your audience to know and how easy it is for them to grasp it.

Data visualization is the art of presenting data visually and artistically as opposed to traditional reporting. For example, charts and graphs require much less time to understand and analyze than tables of data. You can also easily identify patterns and trends from them. Good visualization turns static data points into a cohesive story that anyone can understand.

The tools you use to create visuals are also important as poor data visualizations can misrepresent data and confuse your audience. Visualization tools, such as dashboards or apps, organize data, automatically visualize it in various forms, and are customizable to meet your specific needs.

Presentation

Interest in finance stories depends on many factors:

Context: Understand who the data story is for, what you want them to know or do, and how you are going to present it.

Audience: Align the story and its components with the knowledge level of the audience.

Story structure: Ensure that your story has a beginning, middle, and an end. The beginning sets the stage or provides context; the middle constitutes the actual story, and the end suggests possible future action.

Quality: Be clear and concise. Avoid mistakes, such as misspellings and grammatical errors. The analysis and descriptions of the software used can be avoided as it could be of little interest or value.

Authenticity: Make data personal, memorable and emotional by using metaphors or anecdotes. Make it believable with facts as proof.

Insights: Have clear explanations as to why the analysis was performed; what method, data, metrics, audience and method was used and why; the significance of the results and their impact; and what actions should follow.

Adaptability: Be prepared to wield questions and criticism and to suggest alternatives to current business practices.

The best reason to embrace data visualization is simple… If you don’t, you’ll be left behind. Making numbers visible is important. You may not be a natural storyteller or have storytelling experience. However, you can learn to tell credible finance stories with the help of data visualization tools available nowadays and your expertise. If you can improve your data presentation and communication skills it would dramatically increase your value as a professional.