The FinTech industry: Leading Financial Institutions to improved data access
By Fraser Stewart, Co-Founder & Chief Commercial Officer at Lyfeguard
The financial landscape is constantly evolving and financial institutions are competing to digitally transform their operations to meet customer demands and build a solid future, in the face of an uncertain economic backdrop.
For financial institutions hoping to remain competitive in an increasingly saturated landscape, as more and more alternative options become available, the use of data is no longer an option, but a must, acting as the new currency for the industry.
FinTech companies are leading the change in leveraging technology to create better financial solutions as they disrupt traditional banking approaches. For financial institutions who are generally struggling to adapt at a quick enough pace, looking to lean on solutions that the FinTech industry provide to help utilise the plethora of data available should now be made a priority.
Data can then be used to help them navigate the new financial landscape, enhancing data access which will build out services that put customers at the heart of operations, offering seamless experiences while improving decision making.
Traditional banks who are currently lagging behind in their digital advancements now have the opportunity to remain relevant and competitive in an increasingly digital world by using the data that provides the backbone for financial services, playing a key role in the rising, or falling, of financial institutions.
Data and operational efficiency
Offering customer-centric services must now be a priority for all financial institutions as competitive, and more efficient, FinTech alternatives continue to emerge. Customers are not shy when looking for the next best alternative as they become frustrated with slow and cumbersome existing processes meaning banks must now revamp their approach.
The volume of data generated by financial transactions is astounding and financial institutions should now use this to their advantage by analysing and managing the information they have more effectively.
Data interoperability is now vital in today’s interconnected financial ecosystem and being afforded the ability to exchange data and share information more efficiently now plays a key role in an increasingly saturated financial market.
As more and more financial service providers pop up and customers enjoy the privilege of shopping around, relying on various different offerings to suit their needs, the need for a seamless data exchange between institutions has become evident.
Legacy systems that are currently in use by many traditional banks are often cumbersome and disconnected, often requiring human interaction which can slow down processes even further. They lack the flexibility and adaptability required for smooth data exchange, which is what FinTech companies are currently taking advantage of.
FinTech provides can develop solutions that enable the fluid use of data, offering an agile and collaborative approach to financial institutions and their data exchange processes. Open banking standards and APIs mean banks and providers across the sector can integrate with one another making data sharing easier, ultimately enhancing their services.
On top of enhanced data sharing, improved data analytics also have the ability to transform financial institutions operation by offering an improved approach to decision making, risk management and customer service.
Powered by cutting edge technology such as artificial intelligence, machine learning and big data analytics, FinTech organisations can help financial institutions to make better informed, data-driven decisions by gaining insights from the vast amount of financial data that is available, creating a seamless and more personalised customer experience.
Data security
With the mass amount of data that financial institutions are now collecting and storing on behalf of their customers, while using to improve their own business efficiencies, organisations must realise the role FinTech providers can play in ensuring said data is kept safe and secure.
As we have seen, cyber-crime is on the rise meaning financial institutions, who hold sensitive and lucrative information, act as prime targets for attackers who wish to exploit information for financial gain.
FinTech companies have developed innovative solutions to safeguard banks and financial institutions from hackers by implementing technology such as advanced encryption techniques, multi-factor authentication and block-chain based solutions.
For financial institutions who are now looking to optimise benefits of improved data access, stringent cyber security must be thought about and the FinTech industry can help to build trusted solutions to ensure their customer data is kept safe, protecting them from both financial and reputational loss.
The road ahead
For financial institutions to remain competitive and avoid becoming redundant they must now realise the opportunity that presents itself within the FinTech industry.
FinTech providers now offer innovative solutions to some of the biggest problems financial institutions are facing, and by working together, a more solid and unified industry can be created that allows old, traditional banks to remain relevant.
The use of data is now an imperative part of the financial world and solutions to not only make better use of it, but to protect against threats that are consequently created, should be a high priority for banks and financial institutions. It is FinTech providers role to continue providing the industry with the tech solutions they need as the financial services department revamp and modernise their processes.
