ON DEMAND BI/CLOUD TECH Cloudy BI thinking
Retail banks know good data interrogation means good customer service and success. But Neil Ainger finds BI and new cloud-based analytical tools are being hampered by legacy IT and privacy concerns – not to mention a lack of budget, due to compliance demands, and a need for better underlying data governance.
IBS Journal May 2016
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overhaul their IT to cope with rising transaction volumes and provide digital platforms that can cope with 24x7 service demands across online, mobile and social media platforms has long been evident.
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There is also a need to provide better fraud and sanction detection in today’s more tightly regulated, digital environment and battle tech-based newcomers such as WeBank, Atom or Fidor, or else face disintermediation. In this environment data must be seen as an asset and better managed, shared and analysed than it has been in the past.
Some banks are using cloud computing to overcome silos and provide customer-facing business intelligence (BI) tools to mine their data. “BI provides behaviour insights that help us understand our customers better and offer them relevant, contextual, real-time capabilities to improve their experience,” says Bipin Sahni, SVP of innovation and R&D at Wells Fargo, as he explains how his firm wants to use BI to prevent silos and static data. “Real-time data will be key, as it drives dynamic customer experiences. Insights have to be actionable utilising a combination of internal and external data. We also prefer on-premise cloud deployment models.”
Security and privacy concerns are to the forefront at banks, which usually avoid public clouds and are wary of hybrid clouds without strong oversight. On-premise control is still the favoured model.
he requirement on traditional banks to
Digital & challenger banks
New digital-only players such as Starling don’t have legacy systems that can inhibit established banks’ ability to offer mortgages at the right time, in-situ payment offerings, supply chain timestamps and other customer-centric real-time ‘rich’ data, which could help grow the business.
Challengers, such as Metro Bank, are also able to more easily meet expanding regulatory demands thanks to newer, more flexible systems. Meanwhile, alternative payment service providers (PSPs) don’t always face the same regulations and can often scale up or down more easily, using the cloud to handle expanding data volumes.
All these newc omers could take business away from traditional banks, especially as they struggle to cope with lower returns on equity post-crash and higher compliance and running costs due to their older technology. Against this background, getting budget to greenlight BI solutions to retain and win customers is not easy, but compliance projects can sometimes provide useful side benefits and cover for ‘improve the bank’ initiatives.
Digital capabilities and analytics are the new battleground and, while such deployments can be used to meet regulatory reporting requirements, they can
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