Matt Lovell, CTO, Centiq

Matt Lovell,
CTO, Centiq

The Financial Services industry has been swept forward by the avalanche of collected data, which is doubling every year. Analysing the abundance of data to drive value, therefore, has never been more important. It presents a clear and present opportunity for forward-thinking leaders to quickly improve the way they conduct business.

Unprecedented regulation, the introduction of new technologies such as cloud services, greater emphasis on risk reduction, and increasingly demanding customers, highlight why Financial Services organisations need a data-first approach to drive digital transformation. The challenge is how to harness it.

Harnessing data will play a big part for those digitally transforming their services to meet customer expectations. Additionally, it allows established Financial Services players to compete against the huge array of FinTech Challengers already delivering a richer customer experience. The key is in collating all the information from the wide array of sources to bring products and services together. This is transformation driven by data.

Faster, better, automated

One of the pre-requisites of a data-first approach is automation. Achieving rapid, large-scale process automation became a reality for some financial services organisations only recently. The more they automate the fewer branches are needed and the more cost reductions come to the fore. Organisations who can automate core day-to-day processes faster will feel the biggest benefits sooner. Digitisation makes it far easier and smarter to take and change products and services.

Banks, for example, have made big improvements to their customer-facing operations,often led by online banking. However, too many processes, particularly those in the back-end, are still seen as archaic. The continued manual nature of these processes is both extremely costly and inefficient. Additionally, data quality is put at risk due to a rise in inconsistencies and the errors associated with ‘old school’ paper processes. With in-memory technology now available to automate and improve these processes and deployable both on-premise or in the cloud, there is no excuse to incur needless expense and errors anymore.

Business intelligence and security join forces

Better use of data delivers greater business intelligence uncovering how organisations are making the most of their human resources and capital. The real strategic value in data is the insight it gives into what will happen in the future. Being able to predict how customers and competitors’ customers will behave, and how that behaviour will change, is critical to tailoring, personalising and pricing the future products and services that will drive growth and revenue.

Big data should be about changing the way a company does business to harness the real value hidden in its data. Doing so can re-shape the interaction with the market and increases the lifetime value of its customers. In-memory computing, a faster way to process large data sets, underpins the new role of data, helping remove the burden of maintaining legacy systems and calculating the cost of ‘lost’ data. Today’s in-memory database technology promotes smarter, better business decisions.

Increased business intelligence also improves security. Performing real-time analysis of data can prove whether transactions are genuine or not. This starts by collating Telco company data from a mobile device, all the way through to the banking application systems themselves to spot unusual transactions. Thanks to the firepower of in-memory analytics, organisations can monitor, pick up and stop fraud automatically. The way Financial Services organisations address and mitigate risks, such as those which recently caught out Tesco Bank, are wholly dependent on how they pick up fraud detection and then manage the fallout.

Unlocking the door to customer loyalty

Today’s customers are spoilt for choice by Challenger banks who attract and retain with personalised offers and services. Financial Services organisations are starting to adopt a similar approach to improving customer lifetime value. Because banks’ nervousness about adopting in-memory technology platforms such as SAP HANA, for some, it’s a massive leap of faith to come into the HANA environment. The value needs to be proved first to begin augmenting the business. The unintended consequence is digital transformation is slowing down as a result.

Businesses want their customers to be loyal. Whether an organisation is large or small, better use of data drives acquisition and retention. It helps Challengers eat into the market by delivering a more personalised experience, and larger traditional organisations keep customers happy. To compete in the modern marketplace, traditional Financial Services organisations have a lot to do if they are to leverage their data assets.

Combining the automation of fraud searching with better customer service, data can drive digital transformation. This enables management teams to make better decisions. Pioneering Financial Services organisations who unlock the true potential of data will surge forward on a wave of customer experience, profitability and regulatory compliance. Those who fail to latch on risk being left in their wake.