Yet, despite the abundance of available data, many finance sector firms are struggling to glean insights and support decision-making processes. Best value is not being achieved.
Much of the problem stems from the fact that data is often retained within siloed stores. A mix of legacy systems and new platforms has led to data being spread throughout organisations which then struggle to gain fast and efficient access to it.
Faced with increasing competition from the growing number of fintech firms entering the market, established players realise they need to rapidly address this issue. They must integrate their data reserves so they can readily be used to boost the business bottom line.
There is a range of benefits that will flow from an effective data integration strategy, including:
- Better customer service:
In 2020, customers increasingly expect to be treated as individuals. Financial services companies can achieve this by making use of the large volumes of data generated by digital interactions. While new fintech players have been able to take this approach from the outset, established firms have found it more challenging. They need to remove data silos and create a single, integrated store to achieve a complete 360 degrees of every customer.
- Improved adherence to governance and compliance requirements:
Having all data housed in a single, centralised store makes it much easier to comply with regulations such as Europe’s Global Data Protection Regulation (GDPR) and Australia’s mandatory data breach reporting laws. Rather than having to manage and secure multiple data stores, all efforts and resources can be brought to bear on just one. Finance companies should consider making use of a cloud-based data platform that offers security at each level of its design to achieve maximum protection and compliance.
- Removal of data sharing barriers:
The rise of data sharing strategies is an opportunity for financial institutions to make better decisions with the aid of third-party data. This, in turn, can lead to more efficient operations and higher revenues. Data sharing also enables firms to enhance consumer experiences, because customers who share data with financial institutions can receive benefits such as personalised products and services.
Traditional legacy systems tended to be barriers to easy sharing, however an integration strategy can overcome this. Financial institutions can even leverage public data sets to further enrich analytics and obtain deeper insights. They can also share their data with other organisations where appropriate.
- Greater ability to leverage cloud platforms:
Once a data integration strategy has been completed, finance companies can investigate the benefits of using a number of different cloud platforms for data storage and analysis. Using multiple providers strengthens business continuity and reduces risks because, if one provider encounters problems, resources from another source can be used. In the financial sector, where companies can handle millions of transactions per minute, any outages can be very costly and so reducing risks is important.
- Improved protection against fraud:
Financial service firms are under constant attack from cybercriminals and fraudsters. A consolidated data store that can ingest and analyse various data types can form the front line of defence against these threats. In-depth data analytics, combined with high-volume data storage, can help detect risks in real time so steps can be taken to ensure data remains secure at all times.
Advantages such as these are clear evidence of the benefits of having a comprehensive data integration strategy. With such a strategy in place, financial firms will be well placed to take advantage of new opportunities as they arise in the market.
Peter O’Connor, vice-president Asia Pacific and Japan, Snowflake