By Matthew Glickman, VP Customer Product Strategy, Financial Services, Snowflake.
Financial services are built upon data. Every transaction, payment and bank transfer generates fresh data that can be harnessed to build crucial business insights. Yet quick and seamless access to insights is often impeded by the fact that data is siloed in disparate locations or legacy data platforms. The presence of data silos makes a unified view of data unattainable for many companies, rendering strategic goals such as personalised buying experiences, meeting global regulatory standards and increasing overall operational efficiency all but out of reach.
Furthermore, the pandemic has put increased pressure on financial services due to the volatility of the financial landscape. Businesses must swiftly adapt their operating models to an unpredictable market, which is a challenge many are still trying to navigate in 2021.
By jettisoning legacy systems and embracing emerging cloud technologies companies are able to leverage their data at speed and remain agile in an otherwise challenging landscape. The data cloud, for instance, is a global network where thousands of organisations can mobilise data with near-unlimited scale, concurrency and performance. Mobilising data in this way will help keep savvy financial service providers ahead of the competition. Here are just three business advantages of deploying the data cloud.
A 360-degree customer view
The cloud offers companies the opportunity to house all their various types of data in one secure place, enabling them to personalise services for customers. By using the data cloud, companies have a consolidated governed location for all types of data (for example, clickstream, transactional, and third-party) that can ingest data from new sources such as IoT devices. This enables organisations to gain a 360-degree view of customer behaviours and preferences from multiple inputs.
A full customer view is fundamental for a successful personalisation strategy as it enables organisations to pinpoint high-value customers and ensure they have a good experience at every touchpoint. Without real-time visibility into customer interactions, providing the best possible customer experience just isn’t possible.
Over time, digital banking platforms will evolve to incorporate ML predictive models to drive even more personalised banking behaviours. This will only be achievable for organisations who successfully tap into the data cloud, as the success of ML models will require support from ever increasing volumes and access to datasets, both within and external to an organisation. The more an organisation can tap into customer personalisation, the better equipped they will be at customer retention and remaining competitive.
Real-time data insights
To ensure fintechs can continue providing the best possible customer experiences, and adapt to any demands posed by the pandemic, having an acute awareness of all data available will be key for these insights. Especially during periods of financial regulation changes, such as the impending Strong Customer Authentication (SCA) legislation we’ll soon experience. Adopting a cloud data platform that offers the direct and secure sharing of data without the complexity, cost, and risk associated with legacy data warehouses is one such solution. With simpler, enhanced data sharing, companies can quickly and easily add new data products, and get near real-time insights across the business ecosystem on how this is operating. Offering a standalone data product to data consumers can lead to substantial revenue. For example, financial companies that collect tick-by-tick stock market data can use a cloud data platform to create a data project that they can sell to hedge funds.
A cloud data platform can also reduce the manual effort and copying that is necessary with traditional data sharing tools. Instead of physically transferring data to external consumers, companies can provide read-only access to a segment of their information to any number of data consumers via SQL. By breaking through barriers between disparate data systems, companies will find new sources of revenue and opportunity.
Collaborative data sharing
The rise of digital-first banks, the increased availability of online services and the ongoing surge in mobile banking all represent the modern evolution of how customers now interact with their finances. To meet the demands of today’s customer, financial organisations will see big benefits in collaborating with other finservs through real-time access to data. For instance, if a customer is using a third party fintech to track their finances, a financial institution must share data with that fintech organisation so their customers can access their accounts.
Research by the Economist Intelligence Unit, in partnership with Snowflake, revealed that the financial industry values data from third-party or syndication partners more highly than any other industry. As much as 51% of respondents from the financial sector said that it is their most valuable source of data, far above the survey average of 42%. Financial institutions that do not take steps to improve the accessibility of its data risk frustrating their customers or losing them to a more agile and collaborative financial institution.
Data collaboration can also help improve instances where investment banks may otherwise have been forced to hold excess capital. This is because aligning on risk exposures and liquidity is executed through nightly correspondences instead of what could be real-time data sharing through the cloud.
With fully governed, secure data sharing, companies can also easily determine who sees what and ensure all business units and business partners access a single and secure copy of their data. Not only does this enhance efficiency, but centralising data into a single source of truth, rather than in separate locations, will boost data security.
The benefits of tapping into the data cloud are compelling and demonstrate the business and customer value of leaving legacy systems behind. The continued challenges of the current market now make it impossible for financial companies to ignore cloud computing capabilities as doing so would leave them firmly behind the competition. The data cloud gives businesses a future-proofed technology stack that delivers business agility, competitive customer services and enhanced data sharing capabilities. All these aspects are characteristic of a modern company fit for purpose and ready to capitalise on data.