Banks and related financial institutions have a special role to play in today’s largely digitized world. Not only have they innovated ahead of other sectors and so are already agile, modernized and digital but they also sit at the heart of society, creating a bridge between global enterprise and local communities. As such, they’re perhaps uniquely able to act with scale and urgency to solve some of the tough social challenges the world faces, while also strengthening and future-proofing their own business models.
One element that any banking or financial services CIO keen for their organization to pursue the greater good alongside profits now urgently needs to consider is understanding why data is the right focus rather than infrastructure and applications. Essentially, how can you make data less rigid and hierarchical, more interactive and agile?
All companies are becoming technology companies.
The fact is that our physical and digital worlds are converging at an extraordinary rate, prompted by new technologies such as IoT and robotics which are generating unfathomably large new data loads. Gartner projects that there will be nearly 21 billion connected ‘things‘ in the world by 2020. According to the World Economic Forum, 1 trillion sensors will be connected to the internet in 2025.
Right now, the most competitive financial institutions out there are engaged in building a digital twin for their physical world. This data-based replica of their physical assets, processes, people, places, systems and devices all integrated into IoT, AI and analytics systems aims to create a living simulation model. This allows an organization to confidently drive digital transformation by proactively modelling, testing and transforming data into insights. These insights can then be turned into monetization opportunities and monetization opportunities into richer customer experiences, which can be designed to power all sorts of positive social outcomes.
Making ‘customer first’ work for the world
Digital transformation is traditionally about evolving your solution sets and approach in a timely way to do things better than your competitors — whether that’s optimizing logistics, improving customer experience or rolling out exciting new AI-powered operating models. At the heart of it is almost always the desire to focus on delivering your products in the way customers want to receive them.
With populations around the world more vulnerable but also more tech-enabled than ever, putting the genuine economic and social needs of customers at the heart of this transformation activity is a great way for the banking sector to power good. By building data eco-systems that help deliver new services customers actually need in ways that really work for them, banks can help to ensure their own financial stability and success and - by extension - that of society.
Every Digital Transformation project is really a data project
I’ve long believed that the smartest way to approach Digital Transformation is not as a series of complex infrastructure or application development projects, but instead to focus on leveraging that ultimate operational gold: data. Why? Because the fact is that infrastructure’s relevance and ability to scale starts degrading almost from the point of delivery. Application development projects almost always bring with them new complexity, security and integration issues too.
Data is different. It’s pure and valuable from the point of creation to deletion — and can become increasingly more valuable the more of it you have, delivering better insights and driving game-changing business algorithms.
So where do you start?
Effecting the good in data requires a mature strategic approach designed to render rigid and hierarchical data structures more interactive and agile. That makes it easy for the banking and financial sector to manipulate data to drive socially-motivated projects and practically power good, improving quality of life for their customers, as well as loyalty and profitability for their business.
With the world in flux around us, this is a great time to think about what you’d like the next ten years to look like for your bank or financial services institution.
About the Author:
As the current Global CTO at Hitachi Vantara, a leading data solutions provider, Paul Lewis leads technology evangelism, frequently speaks at technology and industry events, such as ITMG CIO Roundtable and SAP TechEd, and is a reoccurring lecturer at various educational institutions, using his expertise garnered from his tenure in the financial industry.