Jay Wilson of Albion VC, Tech Investment Arm, Albion Capital Group LLP says: “the increasing complexity of an organization’s data estates and the growing recognition of data as an asset, combined with increasing regulatory demands, is bringing data management into the limelight.”
The route is not linear, but we know that the answer lies in better data management and reshaping old architectures. It’s time for FIs to rethink their approach to data management and analytics - and data fabrics hold the key.
Challenges facing financial institutions
First, let’s understand the challenges facing FIs as detailed in LinchpinSEO’s report:
Data breaches and cybercrimes
The financial industry understandably carries valuable customer data and ample reason for hackers to want to gain access to that data. If successful, these breaches can compromise customer security and break essential customer relationships and trust.
If we reflect on the CapitalOne credit card breach of 2019, where some 100 million credit card applications were stolen, containing social security numbers, bank account numbers, as well as full names, addresses, and dates of birth - named one of the most devastating in the FI industry - we can see how crucial the nature of protecting customer data is for FIs, and why ever-changing compliance and regulations must be upheld.
Modernizing applications and incorporating new technologies
The global health crisis has shown that legacy practices cannot stay in place forever. While stay-at-home orders were put in place, ‘ordinary’ trips to banks or ATMs were stalled, with technological advancements needed to grant customers access to their funds digitally. It should be no surprise that Forrester reported in 2020 that 85% of global banking decision-makers were embarking upon digital transformation.
Delivering to customers’ increasingly demanding expectations
Hand-in-hand with digital transformation efforts comes one of the reasons why the task is so high on leader’s lists: customer satisfaction. The same Forrester report tells us that improved customer experience is the top driver for digital remodeling.
Customers want unfettered access and on-demand services, as expressed by Anirban Bose, CEO of Capgemini’s Financial Services and Group Executive Board Member: “By overcoming outdated legacy mindsets and adopting Banking-as-a-Service, financial institutions will move beyond their core banking products, create new offerings, and provide their customers with personalized experiences.”
Willingness of FIs to enter digital transformation
Digital adoption has accelerated in the past few years, leading to a shift in how we behave. ‘The Future of Video Banking’ from Financial Brand and Accenture’s ‘Empathetic Banking’ report from 2021 concluded how:
- 84% of bank CEOs believe that their business is fundamentally changing the way it interacts with customers
- 65% of people want FIs to proactively deliver advice based on their spending habits
- 50% of consumers now interact with their bank’s digital channels at least once a week
Modern consumers are digitally savvy, and their expectations are high. Financial institutions must now meet these demands, which include personalized offerings that consider their current financial situations and anticipate future needs.
The ability to accurately extract value from data is needed to accomplish this. FIs must tap into their data resources to truly understand their customers and offer them comprehensive solutions. But successfully extracting these insights relies heavily on the quality of data that is collected and stored in their data library.
What is a data fabric, and how they can help FIs
Data fabrics enable better insights by removing data silos and providing a single point of access to all your data from an extensive pool of distributed data sources.
This, in turn, helps when it comes to identifying relationships in the data, letting you extract value and gain a 360-degree view of your customer, as well as helping to inform strategic decisions, increase productivity, and improve the overall customer experience.
The data fabric also ensures correct data governance, which is crucial when it comes to scaling the use of data for analytics and AI. The main four advantages of data fabrics are:
- An agile and flexible structure
- Enhanced data visibility and visualization
- Improved access to data
- Better data governance
FIs can directly benefit from data fabrics by rejuvenating their legacy architectures and replacing them with something fit for 2022 and beyond. Enabling the extraction of data on-demand, data visualization, and granting a 360-degree view of the customer - yet, you are only as strong as your weakest record, meaning there’s room for one more component in FIs’ data fabrics.
Data validation is your data fabric’s missing component
With so much data accessible, we must ensure it is clean, validated, and a single source of truth - which is where Loqate’s verification and enrichment tools can help. When businesses do not prioritize data quality, it not only impacts their bottom line but directly impacts their bid as a central player in the digital-leader space.
Featuring real-time capabilities for address, email, and phone data verification, Loqate works by cross-referencing, combining, formatting, and standardizing the data from multiple sources within individual countries to provide customers with access to the world’s most comprehensive and detailed repository of global address data.
By partnering with Loqate, your FIs can stand at the top of the data-rich world, as well as benefit from:
- Improved data analytics
- Improved data visualizations
- Reduction in costs of unverified data correction
- The ability to mitigate compliance risks when building and utilizing data fabrics with AL/ML-driven data validation and data enhancement capabilities
Learn more about how integrating Loqate’s verification services into your data architecture can help deliver high-quality data to your data fabric ecosystem in our whitepaper, “Data verification solutions: A must-have component of your enterprise data fabric.”