The importance of firm data foundations in a digital-first bank

By Des Viranna, Chief Data & Analytics Officer and Managing Partner, Data & AI and Nikita Dhami, Head of AI & Machine Learning and Analytics Business Solutions, Data & AI

The importance of firm data foundations in a digital-first bank

Data analytics create firmer foundations. A sound, digital data strategy will build loyalty among customers, and minimise attrition.

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In the competitive world of banking, the recent global disruption has brought customer relationships into sharper prominence. Meanwhile, the many challenges that were already impacting the sector have not let up. FinTechs continue to erode market share. Digital engagement is as essential as it has ever been. Customers continue to become ever-more wary of customer service that seems to be less than precisely attuned with their needs.

The path to a unified view of the customer in banking

In an uncertain world, one thing’s for sure; people and businesses need help. The role of the banking sector in Australia, being the largest part of the Australian financial system, becomes far more personal than it has ever been.

Digital transformation initiatives in banking have so far failed to take hold in such a way as to completely modernise, and change customer perceptions of, the banking sector. Banks have found that workarounds and quick fixes seem to have sufficed. Such approaches have alleviated any investment requirements by sweating existing IT assets, but could well incur a greater cost in the long run.

It is time to catch up. The global disruption shifted the world online. Organisations that had a track record of investing in digital capabilities were able to respond to this shift. Those that had only partially, if at all, made firm inroads in digitising their operations need to make rapid reassessment and take rapid actions.

Laying digital foundations

At the heart of digitisation is data; how it flows, how it is managed, and how banks can derive value from it to better serve customers. Earning and validating customer trust and confidence depends on data to inform the paths to follow, and the actions to take. It is the foundation of realigned banking services in a societal framework of the ‘new norm’, reshaping customer needs and expectations.

Relevance to customers must be based on anticipation, based on analytics. Every contact, with every customer, through every channel, must be based on solid, reliable, unified, and real-time data. The unified view: Data has a straight-line relationship with value. Ensuring that nothing can cause kinks and breaks in this line is a central role of any team member involved in gathering, aggregating, recreating or interpreting data. As to using the insights that data delivers, it can be assumed that this falls to a large percentage of any organisation’s team.

The problem is that teams often work either in isolation, or only partially integrated with other teams. They create their own data and their function- or discipline-based interpretations of the insights derived from it, which may differ to the interpretations other teams may place on it. This is the classic and much-criticised silo structure prevalent in many banks’ operations. While role-focused specialists may bring value to extracting core insights from the data, it is a value that can be substantially expanded when the insights are shared and integrated across the entire bank, and every customer-facing and operational function.

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The importance of firm data foundations in a digital-first bank

The path to a unified view of the customer in banking

Laying digital foundations

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