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data analytics: Adopt a mobile channel first approach; Look at the customer journey, not the process; Introduce a new core banking system, or truly digitally transform it.


“The core isn’t sexy, exciting or as easy to get VC funding for, unlike many front-end FinTech developments,” says Jiang. “It is on the operational back-end of the business so it takes hard work to transform it. You need to innovate in the core, however, in order to improve customer data handling and analytics universally.”


The requirement is to be data-centric and aligned, moving away from a business versus IT approach, so that people, process and technology are aligned. “Most Tier 1 banks aren’t really changing,” says Jiang, barring a few exceptions. “They are just bolting on new apps, mobile channels and so on, without doing the necessary underlying transformation in their core banking systems, or changing culturally.”


Greater use of cloud computing or blockchain technology in future years could transform the core, or even wide-scale adoption of the Basel Committee’s BCBS 239 principles on risk data aggregation and reporting (RDAR). These 14 principles should flow into a Tier 1 retail bank’s operations and data-handling and analytic capabilities from its investment arm and risk department, but as they cover governance and technical data disciples they are notoriously hard to achieve.


The transition from one part of a large Tier 1 bank to another won’t happen automatically. The point is that banks must move towards being truly data-centric organisations, and away from a procedure-based approach, but this takes time.


“Traditional retail banks are very process orientated,” says Jiang. “However, new banks in Asia and elsewhere [with no legacy – Ed.] make no distinction between IT and the business. They are not so procedure-driven. If you take this data-centric approach you should be able to take information out of a cloud-based data lake.”


A cloud-based data lake might be the ideal, but as www.ibsintelligence.com © IBS Intelligence 2017


Jiang admits “it’s not easy” to achieve. According to David Wallace, Global FS Manager at SAS, banks face a number of obstacles in turning the often-siloed customer data they already possess – plus the external unstructured data that is available – into a world-class customer experience.


“Banks have to break through the ‘silo fog’ to get to a single, constantly evolving digital picture of each customer across every relationship,” he says. “They must undergo a digital transformation, in which internal silos are taken apart, moved out and replaced by a single vertical stack of completely integrated applications that support mobile banking and are enabled by advanced data analytics. The latter will provide the insight, agility and flexibility needed to understand and serve customers in the same way they see in the rest of their digital lives.”


Todd Winship, Temenos’ Product Director for Data & Analytics, believes that: “If a bank wants to provide a true 360-degree view of the customer, they must ensure they can achieve accurate matching between core banking and external systems.” Blending internal structured and external unstructured data is important.


Cross-departmental capabilities are also crucial. A fraud department at a traditional retail bank might be excellent but its information is not being fully utilised unless it is shared securely. “Likewise, a compliance department is typically risk-based and siloed,” says Björn Holmthorsson, CTO at five degrees, a Dutch-based digital banking platform provider, who was formerly CIO at Landsbanki Luxembourg.


“At new challenger banks, such as Knab in the Netherlands where five degrees provided some of the technology, they are trying to make compliance part of their business process, and thereby more efficient. They are aligning people, process and technology better, so that onboarding, efficiency and customer service is easier. The key advantage of challenger banks is they are ‘greenfield’.”


Knab already has 125,000 customers in the Netherlands, particularly among small-to-medium-sized enterprises (SMEs) and retail bank customers switching from incumbents. It has only 120 staff, no branches and low


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