The financial services industry is at a pivotal point in its digital evolution. There is a shift for providers from “enhancing digital service offerings to transform themselves into truly effective digital organizations” as assessed by a Deloitte survey. The ability of financial services providers to harness data is critical in attracting, delighting, and retaining customers. Yet while the importance of data is understood, it is still extremely challenging to realize and effect meaningful change.
Firms are burdened with tech debt and endless regulatory compliance, often leaving innovation last to receive the necessary budgets. Therefore, data-fuelled innovation requires a pragmatic, incremental strategy that can be realized over short intervals. Here, I offer some pragmatic steps for incrementally advancing efforts to be a more data-driven, customer-centric organization.
Embrace incremental progress
Enhancements can be achieved in incremental steps with existing deployments and do not require a complete renovation of the platforms involved. For example, providers can start by including more real-time data streams that can enhance the customer interactions. Streaming market data, news feeds, or sending a budget alert can be introduced to a service without a complete overhaul. Cloudera refers to this as universal data distribution, as described further in this blog post. This is a practical approach wherein you can realize enhancements in your services more quickly and avoid long, big-bang projects.
While heavy regulations have always featured in financial services, data regulatory compliance standards have been heightened significantly and laws in this space are constantly evolving. Whether it’s the EU’s General Data Protection Regulation (GDPR) or China’s Personal Information Protection Law (PIPL), passed in 2021, or state-specific privacy laws in the US, the pressure is on to stay abreast and compliant of multiple regulations across borders. So while financial service providers must deliver highly personalized, omnichannel experiences customers receive in other areas of their lives, be sure to keep data privacy and governance at the forefront of your efforts too.
Over my career, I have seen many multi-year projects get launched only to have budgets cut in later phases. The reality is that we cannot take multiple years to realize an ROI as the industry is moving too quickly. We have to embrace the ecosystem approach to renovation. This ecosystem involves multiple components from multiple vendors, which is already the reality in most organizations. Renovating it while realizing incremental ROI—customer or operational benefits—is the pragmatic approach to moving forward.
Leverage the cloud where it makes sense, not because it’s fashionable
Financial service providers continue to grapple with technology challenges and rising costs associated with legacy platforms. Meanwhile, innovations such as machine learning, artificial intelligence, blockchain, open APIs, 5G, and the cloud require providers to reinvent their technology approach to keep pace, better understand, and better serve their customers.
With these rapidly evolving technologies, firms are assessing how they can be more nimble and move more quickly to create new services, anticipate customer needs, and tap into previously untouched markets. We have found many customers across industries looking toward the cloud as the solution to this pace of change.
Our experience so far reveals firms are still in the early stages of understanding the operational model and the total cost of ownership related to data platforms deployed in the cloud compared to on-premise deployments. In some cases, firms are surprised by cloud storage costs and looking to repatriate data.
We encourage organizations to start with their business goals, followed by their data strategy to support those goals. The final step is the choice of the deployment model. Providers should also examine the data governance approach required to manage the chosen deployments adequately. It should be extensible to align with the privacy regulations I mention above as they will continue to evolve. At Cloudera, data governance is a key pillar addressed at the foundational level with our Shared Data Experience (SDX). SDX manages security and governance across deployments, so it supports a firm’s choice and preference, regardless of the model chosen.
Take the first step
Cloudera’s hybrid data platform enables financial services organizations to access and utilize real-time and batch data from wherever it resides to deliver timely, personalized customer experiences and automated customer service solutions.
Cloudera Data Platform (CDP) facilitates the quick and effective building of business applications around the emerging, more fully realised customer profile. A unified data fabric centrally orchestrates disparate data sources intelligently and securely across the organization’s multiple clouds and on premises. New use cases can be developed incrementally to better engage with customers and prospects. No matter the environment (private, public, multi-cloud, or on premise) or enormity of the data sets, CDP ensures consistent data security, governance, and control across the data life cycle and across all environments while mitigating risk and costs. It provides data access policies and state information as an always-on layer in CDP to meet the needs for ever increasing regulatory compliance and reduce business and security risks in handling sensitive data, and provides safe and agile self-service access to data and analytics.
To find out more about how Cloudera empowers financial services leaders to realize the endless possibilities of data, read our latest FSI Guide, A world without limits.