Gathering, checking, storing, securing - there are plenty of hoops to jump through before any organisation can actually use data in any meaningful way, yet data-driven technology is now so firmly enmeshed in the financial services sector that FinTech has become a standard term.
FinTech has bled into all parts of the industry, from retail banking, to capital markets, asset and wealth management, insurance and trading. The emergence of FinTech in the lending and payments sector, both B2B and peer-to-peer personal loans, as well as innovative models is bringing high levels of disruption to more traditional banks.
Challenger banks built on FinTech are offering simpler products with sexy branding and customer friendly functionality, while many established banks are playing catch up. This disruption and innovation is headline-grabbing, meaning worries for shareholders and pressure to adapt. But, traditional banks should use this as an opportunity to raise their game and not bow under the threat of incursion.
Established financial institutions have consumer confidence and a proven track record in the marketplace, as well as enviable amounts of big data, meaning patterns and trends are there to be identified and used to ensure loyalty and growth.
Recognising that data is a tool, not an obstacle, means that established banks adopting a modern financial services mindset can steal the march on challenger banks.
Technology penetration means that banks must put FinTech at the heart of any future plans; from smartphones to smartwatches, apps to bots, customers and businesses are demanding real-time services at their fingertips.
FinTech enables banks to retain loyal customers as Open Banking and the Payment Services Directive 2 (PSD2) are making it easier for them to access services via their devices – but it also means a large quantity of valuable and sensitive data to protect.
While banks are busy harvesting and harnessing all this data, they should be mindful that data still belongs to their customers: data privacy is paramount.
Embracing a data-first approach to reducing risk ensures strategic advantage because sensitive customer information will be safe during analysis and processing, and avoiding inevitable pitfalls can be reflected as beneficial to customers.
Data security and privacy by design in FinTech will produce a positive-sum game, it’s a win-win for banks and customers. For more information about how our customers are embracing FinTech and protecting privacy, check out our eBook.