The risks are clear - so how can you ensure that your data is quality and correct and that any issues are mitigated with an effective risk management strategy? In this article, I will explain the challenges facing financial services individuals and what the best practice is.
Financial service organizations are still failing to deploy effective data quality and risk management policies. This would be a red flag in any sector, but none more so than in the financial field.
The main issue lies in the framework - or lack thereof. Companies are typically reactive and solve errors on an ad-hoc basis, rather than having an overarching policy to encourage continuous development and allow for error spotting at earlier stages.
Constant firefighting is not a strategic approach. This behavior and reliance on reactive principles skew overarching vision, leading to blind spots. With this sort of reactive habit, it’s unlikely that records are kept with the steps taken to overcome certain problems, making it hard to analyze the velocity at which mistakes arise, within what sector, and with what business impact.
The key to development lies in insights, understanding what went wrong, what went right, and what looks like it might be a problem in a few months’ time. Rather than a day-to-day approach with little strategy underpinning movements, this approach will glean insights that are vital to success in the industry.
Barriers to development
Financial institutions, such as banks and credit unions, frequently utilize personal information to perform credit and background checks. If data is incorrect at the point of capture, it renders this process useless as the records are simply not correct. This can lead to unnecessary costs being issued to cleanse the data at the wrong stage, which causes delays, inefficiencies, and undue stress to customers.
The barriers to development lie with legacy systems and archaic practices, with companies unwilling to upgrade their systems due to the suspected time and money, despite being in the best interests of both their business and their customers.
The key is to cleanse data at point of entry, creating a single source of truth and a golden record for each and every customer in the master record. By integrating Loqate’s Verify solution, when a customer record is submitted, their address information is sent securely to Loqate for immediate verification.
This real-time address verification is powered by the most comprehensive global location data in the market, boasting 245 countries and territories. Not only is data quality improved exponentially, it reduces the data entry time by 78%. Not much time is spent in the initial set up, with easy API integration to capture, parse, standardize, verify, and cleanse address data through one simple-to-use API.
Loqate’s Verify solution is the key to creating a golden record, reducing input time, errors, duplication and more. This verification tool serves not only financial institutions but also customers, as they rely on Loqate for essential credit checks and services.
If you would like more information on fintech, customer data, and how your business can benefit from clean customer data, explore our Global Partner Program.