In this modern world, we consume information as if it were gone tomorrow. With 90 percent of all information transmitted to the brain being visual, visualizing your financial data when analyzing or reporting might be the key to success.
What is data visualization?
Data visualization is a technique to communicate data and information to people of interest. By using visual representations such as lines, dots, graphs, charts, or maps, information is visually presented. It provides information in a more natural way instead of big chunks of numbers and words.
Why is data visualization important?
According to the Social Science Research Network, 65 percent of people are visual learners. All of these people learn, comprehend, and store information better (in their memory) when presented in a visual form (e.g. a graph or a pie chart). Some research contradicts the fact that there are visual and textual learners (and kinetic learners). They suggest that it is a preferred learning style instead of a learning style that is embedded in the person.
Nevertheless, data visualizations are increasingly important because of the world we live in. Every day we consume hundreds of images and pieces of information. Take for instance the social media channels you scroll through. Facebook and Instagram are loaded with visuals to grab and hold your attention. In the end, the goal is to persuade you to buy a product or service. On YouTube, 5 billion videos are watched every single day. Visual content drives engagement! One month after the introduction of the Facebook timeline for brands, visual content (photos and videos) saw a 65 percent increase in engagement. Advertisement companies work mostly with images to display their products. Viewers are 85 percent more likely to purchase a product after watching a product video. Because who wants to buy a product without seeing it first?
So, data visualization is important that is why the title entails that you should visualize your financial data. Why? Well, visualization works from a human perspective because we respond to and process visual data better than any other type of data. In fact, the human brain processes images 60.000 times faster than text, and 90 percent of the information transmitted to the brain is visual.
Therefore, if you conduct a financial analysis and present this to the person of interest with visuals. That person will comprehend the information much quicker. This will save you time explaining, which will lead to extra time to make more in-depth financial analyses for instance.
Additionally, 40 percent of people will also respond better to visual information than plain text. Which will benefit you when presenting your financial analysis and/or reporting as the person listening will understand and process the information better.
WHY SHOULD I VISUALIZE MY FINANCIAL DATA?
To conclude, we’ve listed the top three reasons why you should visualize your data for your financial analyzing and reporting:
- It helps you to convey the message;
As mentioned before, the information presented in a visual form is better comprehended and processed faster by people than textual information. A lot of people also respond better to visual information. So, when you have conducted your financial analysis and you present/report it to someone it will help you to convey the message.
- It saves you time;
Because of the fact that people process visual information faster, you will need less time to explain your findings. This will result in extra time which you then can invest in something else.
- It helps you discover additional trends or find deeper insight.
If one visualizes financial data it is possible that additional trends will surface. For instance, if one looks at raw data in an excel sheet or looks at data that is visually presented. In the first case, one might overlook critical points in the time simply because the data is overwhelming. In the latter case, the data is visually presented in, for example, a line graph that will show that critical moment more clearly.
Therefore, when financial data is visually presented it gives you the opportunity to look differently at your data and you will have deeper insight into your data.
But HOW can you easily visualize your data so that you have these top three advantages? Well, Microsoft Power BI enables people to turn data into an opportunity with their data visualization tools. With the Power BI software, you can create a dashboard to your wishes that display the data you need visually. Because you are probably busy enough already, Check6 has made a dashboard template for you! Curious how that dashboard looks like? Give us a call at +31(0)6-343566110 or send and e-mail to firstname.lastname@example.org and we will be in touch soon.