There is no disputing the fact that data technology has changed the future of the financial industry. One of the sectors most impacted by big data has been banking.
Big data is even more important to the banking sector as more of their services become digitalized. The market for analytics technology in the banking sector is projected to be worth over $5.4 billion by 2026.
Banks turn to Data Analytics as Demand for Digital Services Grows
Nic Redfern is an expert we interviewed last year that talked about the growing importance of big data in banking. You can learn more about these benefits by reading his insights.
Rapid, wide-scale digitization has taken over many important areas of modern life, as evidenced by the rise and continual flourishing of the internet, artificial intelligence, and mobile devices. Finance is in no way exempt, as people have come to rely less on physical, financial transactions and modes of payment in favor of digital equivalents. New forms of data have been instrumental in driving these changes. And as finance continues to become increasingly digital, the demand for banks to provide a more comprehensive array of fast, convenient, and user-friendly online services grows in tandem. Data analytics will be more important than ever as they make this shift.
Lisa Joyce, an author with The Financial Brand, has talked at length about the trends in big data technology in the banking sector. She talked about the shift towards cloud banking, the growing demand for data scientists in the banking sector and the demand for narrow AI.
The question is how well banking executives will be able to utilize big data technology in their new business models. They will discover a number of benefits of changing their approaches to customer service, actuarial processes and other functions to reflect new benefits of data analytics.
The question of how to use data technology to better cater to evolving customer needs is an urgent one for banks operating today. It’s wise to bear in mind, for instance, that the modern customer is generally intimately familiar with technology and will likely have expectations typical of a digital native—among them flexibility, engagement, efficiency, and connectivity, among others. Hence, when it comes to choosing an appropriate digital banking solution, it makes sense for banks to prioritize applications and technologies that will help them develop the following key areas:
Highly Intelligent, Agile, and Adaptable Services
Customers in the digital age have been conditioned to value fast, efficient service. In light of this, finding ways to accelerate onboarding, transactions, and product development and rollout should be a significant priority for banks. Fortunately, many software solutions presently available on the market make it easier to achieve this through well-developed intelligence tools and extensive automation options.
By making use of technology to improve onboarding timelines and to automate other critical day-to-day operations, banks can channel more resources and personnel toward devising attractive new offerings. This enables them to simultaneously address clients’ desire for a more diverse and innovative range of products and services in digital retail banking. It’s essential for banks to utilize software that enables them to create and sell their latest offerings at an enterprise scale.
Enhanced, Personalized Customer Engagement
Investing in big data initiatives geared toward improving customer communication and enhancing engagement across multiple channels can reliably drive consumer loyalty upwards. Effective digital retail banking needs to be able to offer multimodal customer assistance on a platform of the client’s choice, whether via voice or video chat, text-based messaging, email, or some other communication service. Programming intelligent chatbots to assist with simple self-service transactions can also free personnel to attend to more complex customer service cases.
Remote account access functions are likewise helpful for customers who are less comfortable navigating the digital banking environment, needing more hands-on assistance from the customer service staff and more nuanced data-driven insights. Through the right data-driven banking software, bank personnel will be able to gain authorized access to the accounts of such customers and make the necessary modifications on their behalf, as well as guide customers on the particularities of online account usage.
Advanced Security and User Management
When choosing a financial services provider, customers want to be assured that their data and hard-earned funds are well-protected from internal and external risks. Unfortunately, threats to personal and corporate security abound, especially in digital spaces, which is why investing in big data software with highly developed safety, privacy, and fraud detection protocols is a must for financial institutions.
Built-in functions for user management, identity authentication, entitlement and permissions management, and other similar capabilities are some essential security features an effective digital retail banking operation should have. In addition, the ability to deploy and integrate chosen software solutions with other open-source security tools is likewise helpful for fortifying banks’ overall digital security levels.
Easy Integration with Third-Party Systems
Interconnected online platforms make for a more convenient user experience for digital natives in any area. Banks operating in the age of big data thus need to exhibit superior openness and connectivity when it comes to working with partner firms or within digital ecosystems. To concretely illustrate, integration can mean establishing solid links between banks and online payment services, digital wallets, and other similar applications. If these links are proven secure, efficient, and easy to use in customers’ experience, client satisfaction with both the bank and the third-party provider is likely to grow.
The benefits of integration are numerous and significant not only for a bank’s client base but for the institution itself as well. Banks can better scale the distribution of their products and services upwards if they’re able to integrate swiftly and seamlessly with third-party systems. Pursuing greater integration also enables banks to co-build more innovative services with partners, explore new sources of revenue, and remain compliant with evolving industry standards.
Reliable and Scalable Operations
Employing dependable, scalable systems is vital for financial services providers looking to succeed in the industry today. The current business environment demands that banks scale their operations to efficiently serve millions of customers with little to no downtime, often across multiple currencies and locations. In the process, banks will frequently need to adapt to changing standards and regulations in different jurisdictions, as well as the operational costs it takes to establish separate entities offshore.
Cloud-based technology is a reliable recourse when it comes to enhancing business scalability and boosting efficiency, as it allows banks to quickly establish enterprise-grade systems with a minimal upfront investment of capital. In addition, these solutions enable banks to optimize operational costs, access the latest software updates, and efficiently stay ahead of market demands.
Big Data is Changing the Future of Banking
Banks must grow alongside the needs and dispositions of their customers if they desire to stay relevant in this era driven by data analytics and AI technology. Luckily, many digital banking solutions are more than equipped to help them get there. Upgrading their systems with innovative technology is, in many cases, the boost banks need to thrive in the contemporary financial sector.