Next to blockchain probably the most heavily hyped new technology in banking is big data. Yet despite all our discussions, we in the industry still have no concrete set of lessons learned or shared best practices on how to master it.
Yet there is no doubt that big data can make us smarter in terms of managing our information, helping us to understand our clients in a much more profound way, and offering them far more tailored services than we are able to today.
It is also clear that understanding customer behavior will be an important key to our future. Mastering big data will allow us to better identify potential customers with specific needs, better place our products and, crucially, provide a better, more personalized client experience.
Nor is it just about clients. Big data can also help us better manage and mitigate risk, more efficiently deal with increased regulatory reporting requirements, and bridge the gap from our current, siloed approaches to the more connected, interoperable, multichannel approaches of tomorrow.
For this reason, banks realize that the unique client data they own is an extremely valuable asset. The challenge is to learn how to manage it and to do so quickly, before others jump in and manage it for us.
Asking the right questions
Where to start?
I believe banks should be asking themselves a number of questions, including:
- Do we have a clear, holistic view of all data available on a bank/group level?
- How do we ensure we keep up on the constantly changing data protection legislation including crossborder data rules?
- As an intermediary, do we know what client data we can use and how?
- How can we personalize data and make the connections between data sets necessary to create real added value for clients?
- Should we work towards a multichannel approach, or rather integrate all our data in one channel?
- How do we ensure we are always sensitive to clients’ concerns about the use of their data?
While not everyone may be comfortable with the thought, the road to making the most out of big data may lead outside the bank. That’s because the relevant fields like robotics, machine learning or artificial intelligence are extremely complex – really the realm of specialists.
The good news is that we already see external providers selling smart solutions to banks in areas like compliance, KYC, client conduct or AML, and that initial experiences have been positive. These capabilities can make banks faster, more focused, and more knowledgeable about their clients.
As data protection and cyber security improves, banks will find they have more options too. For instance, they can choose to keep their data internally and manage it with third-party tools, or host data on the provider’s cloud with clear and detailed agreements as to how to segregate, protect and use the information.
"I truly believe that today data is our main asset as banks. Making the best use of it is the smart thing to do."
Sandra Laielli, Head Cash Banks, CIC International & Transaction Services at UBS Switzerland AG
To ensure the right big data strategy, banks will first have to do their homework. This includes:
- Defining which parts of the business need to be supported by big data and AI.
- Deciding on the right long-term partner, as big data and AI solutions tend to be complex and therefore hard to change once implemented.
- Learning how to make the most out of smart machines, which will increasingly provide us with our core information (while humans focus on complex situations and the more interpersonal or emotional aspects of the advisory process).
- Getting used to integrating other platforms and services into our own, which can lead to a better client experience as well as new business opportunities.
I truly believe that today data is our main asset as banks. Making the best use of it is the smart thing to do.
Sandra Laielli is Head Cash Banks, CIC International & Transaction Services at UBS Switzerland AG