I recently had the pleasure of attending the 2019 Sibos conference in London. Uniting some of the biggest players and brightest innovators in financial services, the event gave some much-needed perspective into the kinds of broad challenges and opportunities transforming the sector.

From the discussions both on and off the main stage, it’s clear that data will be essential to the future of financial services. We could well be entering an era where the major technology giants of today become the banks of tomorrow. They already have all the systems and technologies in place to deliver unrivalled customer intelligence and experience. All they need to do now is to add the banking element.

In many ways, their task is much easier than the many challenges traditional banks face. Success in banking today depends on being agile and adaptable to change. Banks must also have the ability to respond to the customer in real time with the best deals for the individual. Yet legacy and large institutions are struggling to keep up, encumbered by internal cultures that are resistant to change and siloed infrastructures unable to move at the speed of the customer.

All eyes on the customer

The digitalisation of both the customer and the competition will be the greatest challenge to face banking over the next five years. However, digital technology also provides banks with an exciting opportunity to make sense of the uncertainty and extract value from the chaos.

For the last few years financial institutions have dedicated themselves to improving security, and rightly so. Identity theft and data breaches ruin lives and break the trust between company and customer. Yet it’s clear from conversations at Sibos that attention is shifting. The priority for banks now is less about catching the bad guys and more about attracting and retaining good customers.

Ever-shifting customer demands and regulatory hurdles mean a bank’s survival depends on its ability to glean relevant insight from all available data to deliver the best customer experience. Key to these efforts is a company’s use of customer data. But the problem isn’t the lack of such data but its abundance. Banks are buckling under a data deluge as massive volumes of customer data pours in from mobile apps and devices in the form of financial transactions, purchase histories, text messages, audio and video files, and more.

A gold mine of customer insight

All this data can be a gold mine of customer insight, allowing banks to offer more personalised offers and services. Yet it has to be made usable first. Legacy infrastructures have grown so complex and bloated over the years that finding the data you need in the moment becomes nearly impossible. Some of a bank’s most valuable customer data can even be lost in the system, completely unknown to the organisation. To utilise this vast data reservoir and survive in the long term, today’s banks first need to get their house in order.

We’re likely to see a seismic convergence of systems across the global financial services industry in the next few years. To utilise all possible data and at the required speed, a bank must have an integrated, trusted and complete overview of its data estate. That means connecting once disconnected silos, and rolling out shared protocols and security measures over data – no matter where it rests.

Organisations must ensure all internal and third-party data gets and stays clean, and that it’s managed in a way that doesn’t create redundancies. Inevitably, they’ll also need built-in capabilities to find and fix data quality issues automatically. Abandoning a piecemeal approach to data management in favour of a single product set for data governance and management will become a real advantage.

AI: Banking – but not as we know it

However, data integration and sound governance will only be the first step. Artificial intelligence (AI) has revolutionised fraud and anti-money laundering detection in recent years, but banks are beginning to appreciate its application in customer service as well.

The growing sophistication of AI means it is constantly getting better at recognising individual customers and marshalling all relevant data needed to make a decision at speed and with confidence. Its true value lies in helping banks to know and understand their customers better. This is invaluable both from a security and a customer experience perspective.

For example, consider customers who are looking to buy a house and have been researching various properties online. The next time they log into their online bank account, an AI solution is not only able to quickly authenticate them using a combination of identifiers – such as personal devices and login locations – it can rapidly analyse all the data held on them to offer the most appropriate mortgage rate.

The true value of AI lies in helping banks to know and understand their customers better. This is invaluable both from a security and a customer experience perspective. Click To Tweet

By establishing a partnership between humans and machines – each augmenting the other – organisations stand the best chance of achieving compliance and meeting customer needs in an increasingly uncertain and fast-moving digital world. In the future, the customer experience must be the nucleus around which banks create and deliver their services. Strong data governance and AI capabilities will empower them to do this. Learn more about best practices for utilising data and AI to transform the customer experience.

We conducted a global survey including more than 1’000 consumers and brands from Europe, the Middle East & Africa to understand what defines customer experience today and how it’s evolving through the year 2030. Find the whitepaper here, and experience today, what customers require in 2030.