Financial institutions collect mountains of customer data every hour and are sometimes trustworthy with assets worth trillions of dollars. How can you use this data from Mount Everest to your advantage? And how does integrated finance change the game? Here’s how a sharp data banking strategy can help financial institutions conquer data and beat their competition at the top.
What is integrated finance?
2021 was the year of integrated finance. The term has crept into the lexicon of financial services, and now everyone in the banking industry is talking about it. Integrated finance is the acceleration of non-traditional financial firms providing financial products through their platforms. For example, social media, telecommunications, and ridesharing giants are expanding their revenue opportunities by offering debit and credit cards, digital wallets, and loan services. This is great news for business expansion organizations and for consumers who seek an easy one-stop-shop and value brand loyalty.
Integrated finance can be an opportunity or a threat to traditional financial services companies. The outcome depends on how well your data strategy is prepared for a digitally-driven business. The trend offers a great opportunity to expand the business and further strengthen the customer relationship. On the other hand, banks that are lagging behind in technological innovations will soon be left behind.
Companies that offer financial services but are not themselves a financial services company often outsource their financial offerings to third parties to operate for them. Some financial institutions offer bank as a service (BaaS). Embedded finance is tricky for traditional banks that outsource their BaaS talents because the bank may be behind in its digital transformation. Banks need to invest in technology, unify fragmented data repositories, and break down silos to not only stay competitive, but also to stay afloat.
Transition from modern paper technology to practice
According to Jennifer Manry, vice president of global solutions for industry at VMware, many banks have nobles technological goals; However, they are often prevented from going from day to day. Financial institutions understand the power that artificial intelligence, machine learning (AI / ML) and blockchain will have on the future of the banking industry. Leaders invest in pilot programs; However, Forrester predicts that only 30% of blockchain pilots will reach production. The obstacles that stop many pilots in their tracks are a fragile digital base, inexperienced internal teams and limited budgets.
Partnering with digital transformation experts specializing in the financial services industry can provide tailored solutions to meet your unique business goals. A digital foundation that will work for you now and grow with your organization as it grows should have the following:
These three pillars can then support cutting-edge technologies, such as AI / ML and automation, and give you the tools you need to implement your data strategy, the goal of which is to select the best. client experience.
Customer behavior and strategic insights
The customer must be the driving force behind all of a financial institution’s technological investments: customer acquisition, customer engagement and overall customer relations. Customer-centric banking innovations are all about the digital experience. As face-to-face interactions have been disrupted by the pandemic and are unlikely to revert to pre-pandemic trends, banking institutions need to refine their digital platforms and offerings to meet current demands and keep pace. delight in futuristic features. For example, due to the pandemic, 76% of C-level technology leaders in financial services are accelerate their digital transformation efforts. Banks need to distribute digital services to match the new way customers consume them.
To stay relevant and resilient, banks must continuously innovate to create a best-in-class customer experience. As Ilan Buganim, FEVP and Chief Tech & Data Officer of Bank Leumi, wisely says: “Shape your future to prevent others from shaping yours”. New technologies will boost your competitive advantage, and data can tell you which innovations you should look for first.
Another key element of a strong customer-centric bank is the ability to scale quickly and securely. The only way to achieve this is to have a solid infrastructure, intrinsically safe and a suite of modern applications.
The relationship of data to security
Financial crime is a major obstacle facing banking leadership today. In addition, they must adhere to strict and constantly evolving regulatory compliance rules for data security. A breach not only puts customer data at risk, but also puts your reputation at risk. A data strategy that leverages AI / ML can predict activities to fight fraud.
This isn’t an affront to humans, it’s just the truth: Robotic Process Automation (RPA) and computers are better and faster than us at certain tasks. Making smart, fast, and predictive decisions to neutralize fraud is one of those tasks. When you outsource certain tasks to automation, your human staff is free to work on other value-added tasks that only a human can be good at, like customer engagement.
The future of banking innovation
The right data strategy, complemented by emerging technology, transforms financial operations. It allows you to use data to unlock new revenue opportunities and business data to drive automation and efficiency.
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