May 19, 2021
The noise around Digital Transformation for Banks and Credit Unions can be deafening. Mobile banking, online banking, chatbots, Artificial Intelligence (AI), machine learning, crypto, the list goes on and on….and on. If you feel like you’re drinking from the Fintech fire house, you’re not alone. With this onslaught of technological disruption it can be difficult to know where to start. Here’s the answer: start with data. Keep a laser focus on how you are collecting, managing and sharing your data. It’s the fuel for the digital economy and the foundation for any successful digital transformation effort.
Here’s what you should be thinking about to get started:
This is the most time consuming part of “right sizing” your data infrastructure, but if you get this right it will pay huge dividends. In this phase of development you’re identifying all your data sources. For Banks and Credit Unions, this isn’t just data from your core banking provider. Think about all the ancillary services, like credit cards or wealth management, where customer data might reside, along with data from your online and mobile banking platforms. Any data source that might provide insight into customer behavior or future customer needs should be considered.
From a technology perspective, you’ll need to identify a tool, or tools, for moving data from these various sources into a central repository. This also means you’ll need to make a decision about how to store your data. Good news here is that there are a plethora of options available. Just be very cautious of coupling yourself too tightly to your core provider. You should design a solution that fits the needs of your business and that you own and control. Core providers are notorious for locking you into a solution that makes it difficult and expensive to tap into other data sources or modify the underlying data model. It’s your data, own it.
This section was added to make your compliance teams happy! But seriously, you have to get this right in order to protect your customer’s data and maintain the trust between you and your customers that you’ve spent a lifetime building.
In this phase you’ll be tackling data governance. Here’s a formal definition from TechTarget:
“Data governance (DG) is the process of managing the availability, usability, integrity and security of the data in enterprise systems, based on internal data standards and policies that also control data usage. Effective data governance ensures that data is consistent and trustworthy and doesn’t get misused. It’s increasingly critical as organizations face new data privacy regulations and rely more and more on data analytics to help optimize operations and drive business decision-making.”
Your IT and compliance teams should be “joined at the hip” to develop the appropriate policies and procedures for how data will be managed. Consider including other key stakeholders who are heavy users of data and reporting, like business intelligence and product management. You’ll also need to develop internal controls and audit procedures to ensure compliance with your new data governance program.
Let the fun begin. Now that you have your data infrastructure in place, and the appropriate data governance program has been created, you can start using your data to fuel your business. You’ll typically start out sharing data internally, using Business Intelligence tools or a CRM.
At this point, you’re also ready to start developing APIs, or Application Programming Interfaces, that will let you share data programmatically, both internally and externally. Internally, this can significantly reduce project times by providing a consistent and repeatable way to integrate data with internal bank systems. Externally, this opens up a lot of fintech partnership opportunities as these companies typically have squads of developers who know how to use APIs, and the associated data, to craft incredible customer experiences. You should place a priority on the development of APIs as a critical component of your digital transformation efforts.
In order to meet the demands of customers and provide more personalized experiences and access to relevant financial tools and services, you must understand how your customers are behaving and transacting. Without data, and the ability to deliver that data when and where it’s needed, you simply can’t meet these demands and the customer experience will suffer.
To learn more about how Fortimize can help your team optimize your digital transformation plans with a focus on collecting, managing and sharing your data, contact us.