Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies Sponsored Posts etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites. Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. A very few articles on our website are sponsored posts or paid advertorials. These are marked as sponsored posts at the bottom of each post. For avoidance of any doubts and to make it easier for you to differentiate sponsored or non-sponsored articles or links, you may consider all articles on our site or all links to external websites as sponsored . Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.

WHY MAJOR BANKS SHOULD VIEW NEW DATA PRIVACY REGULATION AS AN OPPORTUNITY

By Dee Houchen, Snr Product Marketing Director – ERP Apps at Oracle 

Not so long ago, banks didn’t need to be exciting. People simply chose their bank based on how conveniently its branches were located and its reputation for stability and solidity, giving little thought to factors like the “customer experience” they received.

All this has changed, of course. The rise of digital devices has transformed the way we engage with businesses in virtually every industry, and banking is no exception. A range of new challenger banks have been quick to seize on the public’s cry for branch-free digital services, putting traditional banks on the back foot as they try to untangle their legacy processes and keep up with rapid change.

The success of these new players is largely thanks to their greater agility, and to how they use customer data to offer more convenient and personalised experiences like the ability to manage one’s finances through a mobile app or self-service portals. This is in stark contrast to most traditional banks, whose antiquated business models make it difficult to work in this agile way.

Where established players do hold a major advantage is in the reliability and security of their service. This why the current wave of data compliance laws, most notably the EU’s General Data Protection Regulation (GDPR), promise to level the playing field. Public concern over the way companies collect, use and share their personal data has reached a boiling point, and the fast-and-loose approach to data that has helped some start-ups rocket to success will come under closer scrutiny.

Traditional players may be able to outperform upstarts like Monzo in the UK, N26 in Germany or Simple in the US, all of which have carved out significant market share by delivering an excellent customer experience. However these companies offer varying levels of reliability and trustworthiness compared with longstanding industry leaders.

Financial institutions are feeling the pressure of this heightened regulatory burden, particularly digital leaders that are advanced in their use of customer data. Recent research from RoubiniThoughtlab reveals 71% of these companies expect the greatest regulatory pressures to be around data privacy. This pressure is also coming from below, with these same digital leaders acknowledging their customers also have rising expectations around data protection.

Banks that have been racing to develop data-driven customer services must now ensure that their approach is compliant every step of the way. With their heritage of security and reliability, established banks are ideally placed to achieve this, though they must adapt and deliver the digital-first services today’s customers expect if they want to remain relevant.

To marry customer service with compliance, banks must also enable collaboration between back office operations and customer-facing business units, two very different lines of business that have until now managed these processes in relative siloes. This includes an open exchange of data between teams, which ensures customer information goes through the same rigorous security and compliance filter as sensitive financial information.

For their part, this helps operations professionals gain a better understanding of customer demands and habits, which in turns allows to them to better support the organisation’s roll-out of new digital projects and strategies.

Consider the case of digital on-boarding, which is becoming the industry standard as banks look for ways to make life easier for customers. By using third-party APIs, banks can combine vital compliance elements, such as credit scoring and verifications, with the convenience of mobile on-boarding. This allows them to take on new customers more quickly while ensuring they respect all regulatory demands.  Oracle recently completed an on-boarding project in a few weeks by using five APIs from different providers, and process that would have traditionally taken nine months.

The regulatory landscape is finally catching up to the market, giving established financial institutions that can adjust to the habits of digital customers the chance to compete with disruptive challenges.  Greater alignment between the back office functions and customer-facing teams is crucial to helping banks realise their advantage, allowing them to deliver convenient digital services on the front-end while ensuring that data remains transparent, trackable and secure across the organisation.