New payment data tech is elusive for many banks
Banks have always created high volumes of data but have struggled to find ways to monetize or otherwise make good use of it. As the pressure grows for fast and real-time payments, banks need to find new ways to leverage analytics. This is necessary in order to understand customer data that continues to grow at an exponential rate and translate that data into meaningful benefits for their customers.
The opportunity to better utilize data is obvious; banks have at their fingertips access to data affiliated with millions of payments transactions per day. But even with this wealth of data, it is a challenge to extract and use such information. This is in part because using manual decision-making processes—as has been the norm—is not tenable, especially in a real-time environment.
As a result, many financial institutions are missing out on the ability to use payments data in a proactive way, to make smart decisions that inform actionable insights, and create competitive advantages that allow them to become data-driven organizations.
But with new technology comes hope. Today, institutions are leveraging cloud and AI, as never before. They are automating data analysis and making access to customer and payment data available to more people across the business, who will in turn be able to make smarter decisions about how processes can be optimized and tailor services to meet client needs. It is the introduction of new technologies such as cloud to reach different data points across the data framework, including machine learning and artificial intelligence to process that data in real time, that will enable this transformation.
Access to, and intelligent analysis of, the right data will enable banks to develop new business models with smart combinations of products and tailor-made services for specific customers. By sharing this data with fintech partners, banks will benefit from collaboration with an endless array of external service providers, including applications that address fraud, AML and cybercrime, but that will also ultimately lead to making the payments experience seamless.
Leveraging payer data and predictive analytics, financial institutions can solve problems for consumer and corporate customers alike. Tasks such as paying bills on time to avoid interest charges or late fees, investing surplus cash into optimal investment options based on cash flow and future needs, and more, can all be automated. And by recognizing user preferences, banks will be able to offer bespoke services that further enhance the user experience.
This payments utopia may seem impossible today, but it is time for banks to begin laying the groundwork. Thinking about how cloud, AI, and data analytics fit into the payments ecosystem is the first step in taking the movement of money from mere transaction to transcendence.