Artificial intelligence: Unlocking value from data
One of the key things I have learnt since recently moving to Dublin is that a little information goes a long way.
For instance, I have already learnt that Guinness tastes infinitely better here than it does anywhere else in the world. Another vital piece of information I learnt the hard way, is that you should never, NEVER, go anywhere without an umbrella. Even if it is a sparkling clear day when you step out in the morning, by the time you reach the end of the road you could easily be under attack #from a sideways-driven sheet of rain…it is not the emerald isle for nothing!
Information is the cornerstone of most of our decisions, and #banks should be no different in making use of the vast quantities of #data that they have in order to determine their next steps or provide new hereto underestimated potential revenue streams.
A slew of regulations about to be implemented, including Open Banking and GDPR, could be seen as an inconvenient obligation—or worse—a threat to the incumbency of the traditional bank. Allowing as they do, greater access to third parties, to the valuable relationship between bank and customer, and greater control to customers over their own data. Banks might take comfort from the fact that customers are currently nervous of sharing their data with anyone other than their bank—85 percent cited the potential for fraud as a key reason they would be reluctant to allow third parties to access their data—in one of our recent surveys. Yet this will only last until a critical mass of a customer’s peers start to recommend an alternative service (think Uberization), and suddenly the returns outweigh the risks.
But fortunately, banks are coming around to the idea that these regulations regarding data management and access are a beneficial catalyst to embracing the next generation of banking services. And that using the huge amount of data they possess to break down revenue siloes centred around a particular product or service, and gain greater insight into their customers, will place banks squarely in the zone to be the innovators of the future.
Banks are still in a position of trust: Most customers would prefer their data be used by the bank, rather than a third party, to provide better services. Although it would be prudent for banks to start adapting the type of service they have now, rather than waiting until they have fixed all their legacy issues, as some appear to favour.
Adopting a data-driven platform model in which a bank is the custodian of this valuable data commodity, and can channel consumers towards products and services offered by others, could create a new revenue channel for banks. They would be able to still offer their own products, but for those they cannot help—perhaps due to risk appetite or a product/service they do not offer themselves—they could conceivably charge other providers a fee for product recommendations to customers.
Providing a secure way for products to be offered and availed of by customers is also within the influence of banks. They have huge amounts of security experience, which incoming financial services providers may lack, and which a bank may also be able to monetise, based on what they know about customers’ needs and spending habits through their data.
Timing is everything though, and waiting to fix all your legacy issues before moving forward could be very costly. Digitally decoupling and adopting a two-speed development strategy to leapfrog over some of these issues, should be more than just a “would like to have” strategy—creating an environment where data can drive forward new products and services, and create multiple new revenue channels concurrently. Developing, deploying, and scaling at speed is within reach of banks, so long as they adopt and adapt to the new narrative of the industry.
As one of Ireland’s favourite sons once said, “Consistency is the last refuge of the unimaginative”, and while the quality of service offered must always be of a high standard, the way in which it is offered or charged for, based on new and innovative ways of interpreting data, is ripe for reimagining.
The post Artificial intelligence: Unlocking value from data appeared first on Accenture Banking Blog.
The banks need to move quickly because while they currently possess the advantage of customers’ trust, the study shows millennials are already significantly more open to using services from non-banks. Banks should use the time before PSD2 APIs become mandatory to strategically plan for open banking, create compelling digital launches, link into ecosystems and gather a developer community to be better positioned before non-banks make their moves.
The banks need to move quickly because while they currently possess the advantage of customers’ trust, the study shows millennials are already significantly more open to using services from non-banks. Banks should use the time before PSD2 APIs become mandatory to strategically plan for open banking, create compelling digital launches, link into ecosystems and gather a developer community to be better positioned before non-banks make their moves.
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