Revolutionizing the Financial Markets

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Featured Story
By Shaun Russell,
Director of Financial Services at Informatica.
ARE BANKS FINALLY
WAKING UP TO THE
DATA REVOLUTION?
As customer data becomes more readily available, customercentricity
should be at the forefront of strategy for today’s financial
institutions. Instead, many organisations are so focused on regulatory
compliance that they see data initiatives as a burden, if they recognise
their potential at all. Industries like retail and digital services which
are faster moving and less regulated are already exploiting these
data streams to improve their customers’ experience. In comparison,
financial services, retail banks and insurance firms have been slow to
react, held back by reams of red tape.
Now, after years of customer data and digital projects aimed
squarely at avoiding the whipping stick of the regulator, are banks
finally seeing the benefits of data? Services like Google wallet, Apple
Pay and in-Facebook payments are just a couple of examples of how
digital giants are developing monetary capabilities that could usurp
traditional banks. With the emergence of services like social banking
app Kitti from Santander and contactless fobs, bands and stickers
from Barclays, banks appear to have finally identified and begun to
chase the competitive advantages of the customer-centric approach
data affords.
Preparing for implementation
Recent research from IDC conducted on behalf of Informatica and
Cognizant shows that improved customer-centricity is often cited
as a key reason for banks undertaking major technology overhauls,
such as core system upgrades and large-scale harmonisation projects.
However, the research also suggests that data governance projects
are currently being driven by European regulators as a result of
heightened interest in data quality issues. Ever-more onerous
demands for reports are being made – to finer levels of detail and over
shorter timescales.
It is true that financial institutions should see data governance
investments as a way of future-proofing themselves against
increasingly stringent regulatory demands. However, for financial
institutions to get the full value out of their investments, they need
to realise the potential for improving customer-centricity. While a
regulator might want to be able to analyse data in real-time, the same
might apply to a product developer, a relationship manager, or indeed
an actual customer.
The pressure towards real-time is now felt just as keenly from the
customer as from the regulator. As more of banking and insurance
migrates towards mobile, customer expectation will be of financial
partners which can provide tailored product offerings in real-time. If
traditional providers aren’t able to do this, new entrants will.
Investing in data governance is the only way to satisfy these
demands. For this, there are a number of things a business must
get right. At the highest level, the company must treat data as a
strategic asset and a source of competitive advantage. If you are
customer-centric, it should be easy to expand your relationship with
the customer and grow the share of wallet. This means making use
of the all the information held about a customer to ensure that the
right products are offered at the right time. It is for this reason that
data should be seen as a strategic asset rather than a cost centre or a
regulatory burden.
Data leads the way
The importance of customer-centricity is no longer up for debate.
Becoming truly customer-centric, which means prioritising the needs
of the customer in every decision a firm takes, will be the only way
for retail banks to protect their market share as younger competitors
bring a new standard of service to the market.
With high watermarks for customer service being set by the likes of
Amazon, Uber and Google, consumers are coming to expect the same
experience from their financial partners. While some parts of the
industry are introducing data-centric business models off the back of
narrow product offerings and brand new technology, many existing
financial institutions are still yet to truly make the most of their data
resources and offer a personal, tailored customer experience. Only
those who can exploit their data resources and master a customercentric
model will be able to achieve the kind of personalised service
which consumers have come to expect in the digital age.