Delivering reliable, clean, timely data into the hands of decision makers is vital for financial institutions. While this has been true for quite some time, data is becoming more important than ever. The events of the past year have irrevocably demonstrated this point, with financial intuitions realizing just how powerful accurate data is when it comes to making pivotal decisions.
Adding to this complexity is the explosion in the amount of data we’re creating. You only need to revisit this mind-bending stat from TechJury to realize just how much we’re producing: “1.7MB of data (was) created every second by every person during 2020. In the last two years alone, an astonishing 90% of the world’s data has been created. 2.5 quintillion bytes of data are produced by humans every day.”
What does this increased focus on data mean for financial institutions?
- The cost of managing data is only going to increase: The amount of data is growing, and with that comes growing costs associated with accessing, ingesting, processing, and storing that information. More data means more throughput and more storage, both of which you’ll pay for. And if you haven’t got systems in place to handle the increase in throughput, you’re going to experience delays. This can not only cause reputational damage, but can also have regulatory and compliance impacts if you don’t have appropriate systems in place to meet your obligations.
- It’s becoming harder to compete with emerging players: There’s certainly a benefit to having an established business in that you’ve got insights at scale. With that comes the weight of managing legacy systems and architecture. The more information we pour into our systems, the harder we have to work to be agile.
- Customers now expect smart insights: We’re all driven by the technology that powers our lives. And today’s customers expect financial institutions to mirror the intelligent insights that our smart watches and apps deliver to us. There’s a growing expectation that if our watches can tell us the how we can improve our health through personalized exercise goals, sleep reminders, and mindfulness breaks, then surely our banks can tell us how and when to optimize our portfolios, how to increase savings, or how to maximize lines of credit.
- Data is essential for people to do their job: In the workplace there’s an expectation, particularly among those coming out of business school, that people will have access to the information they need to do their jobs. Data has become an integral part of doing business. We are rapidly moving beyond just making sure we have the data, and it’s now more about how reliable and accessible it is that makes the difference to employees.
Beyond breaking silos
There are many views on how organizations can improve movement and quality of information. However, some of these approaches can create their own issues.
Financial institutions need to move beyond breaking silos and focus on timely, clean, quality, solutions around data catalogues. This will allow them to map out the entire data needs of the organization. In short, they need to consider the connectivity of their information — how their data can be shared seamlessly across the whole data ecosystem. It’s what we refer to as “data fabric”.
What is data fabric?
Data fabric is an architecture and set of data services that provide consistent capabilities across a choice of endpoints spanning multiple on-premises and cloud environments. Gartner describes it as “frictionless access and sharing of data in a distributed network environment.”
How smart data fabric is driving agility in financial services
Implementing a smart data fabric allows financial institutions to make better use of their existing architecture because it allows their existing applications and data to remain in place. It then integrates, harmonizes and analyses the data in flight and on-demand to meet a variety of business objectives.
Having a smart data fabric allows financial institutions to remain agile in a number of ways:
Allows businesses to make smarter decisions faster - Banking is seeing new market entrants like gaming companies, retailers, transports and telcos, all clambering to get in on the financial services game. A well-constructed data fabric empowers executives and lines of business to monitor and anticipate changes, both positive and negative, in internal and external environments.
Helps identify new segment opportunities - One of our customers anticipated the impact of distressed debt amongst their credit card consumers and utilized their data fabric to proactively contact potentially affected clients. By offering extended payment terms they fostered stronger customer loyalty and mitigated a potentially large bad debt situation. This same process of customer segmentation can be used to identify new market opportunities.
Enhances customer experience - A smart data fabric allows faster processing of clean reliable data which financial institutions can use to share insights with their customers. By sharing these insights, financial institutions can foster loyalty and drive spend in a highly competitive environment.
Drives efficiency and cost savings - Finally, making decisions based on timely, accurate data allows financial institutions to reap all the benefits just described. Without the certainty that comes with reliable data, none of these decisions can be made efficiently or cost-effectively because the time and effort associated with managing data simply outweighs the benefits.
Leading financial services organizations are leveraging smart data fabrics to power a wide variety of mission-critical initiatives, from scenario planning, to modelling enterprise risk and liquidity, regulatory compliance, and wealth management.
This is a sponsored post in collaboration with InterSystems, Gold Sponsors of FinovateFall